It’s money that matters in China-UK’s new found love

By Rahul Sharma

Kate Middleton’s snazzy red dress, a hop into a neighbourhood pub for a pint of beer with Prime Minister David Cameron and a jolly ride with Queen Elizabeth in a royal, six-horse carriage would have definitely pleased Chinese President Xi Jinping during his maiden state visit to the United Kingdom.

That the latest round of pomp and show came soon after Xi was feted – U.S. President Barack Obama merely gives additional credence to the fact that the world cannot afford to overlook its second-biggest economy and a fast-growing military power that astutely holds one end of the global power balance.

The Chinese media dubbed Xi’s foray into a country with which the Chinese have had  an oddball relationship for several centuries, a “super state visit”, signifying its importance to Beijing that has been trying hard to redefine its ties with other major powers.

The reality is different. The United Kingdom is no more a major power; it handed over that trophy to a surging United States at the end of World War II. In the past seven decades, since then, the UK has only continued to lose its grip over the world it once ruled.

So while for China its burgeoning ties with the United Kingdom might be the start of a “golden era”, for the latter it is more about a source of cheap funds for infrastructure that it needs to push its economy – some of it like steel manufacturing already battered by cheap Chinese imports. It is almost like a poor man asking a wealthy man for his daily bread.

Beijing, keen to spend its hoard of cash, is not complaining. Not when its president gets to ride with the Queen and sign deals worth a whopping $61.5 billion – most of them in the energy sector.

Cameron has reasons to cheer. He is getting cheap dollars to push nuclear power that will provide electricity to millions of British homes, which he himself can’t raise given Europe’s current economic disability. For China, it is a win-win situation too. With a slowing domestic economy, it is looking for its companies to go out to seek contracts that would buoy their bottom line.

The energy deals are indeed big. Not only will a new nuclear power project built with Chinese help provide electricity to millions of British homes, it will also create thousands of new jobs. More projects using Chinese-built nuclear reactors are in order. For China the projects become a testing site for its technology that it can then take to other developed nations.

But trade and investment is only one part of the story that could go horribly wrong on other sticky grounds. Given the Western world’s penchant for slamming China on human rights and its authoritarian government, and mutual suspicion, Cameron’s overtures to Beijing to invest in Britain’s energy and infrastructure sector will raise red flags in Washington that considers China’s rise a threat to its current influence in East Asia.

While economics works well between China and the United Kingdom, it is a tricky diplomatic route for Cameron and he will have to ensure that his newfound bonhomie with Xi doesn’t make the old ally in Washington too nervous. He will have to carefully walk the fine line between keeping old, historic ties in place and nurturing his new relationship with an ambitious China that would only want more in the long run.

At some point in the near future he may be pressed by the United States to take a stand on ticklish diplomatic issues involving China, such as Beijing’s aggressive postures in the South China Sea where it is building islands to effectively counter the U.S. navy that recently sent one of its ships to take a closer look at what was brewing there. Cameron will then have to take a quick call on what’s best for him. Xi will, of course, be watching.

Rahul Sharma, President, Rediffusion Communications, is a former newspaper editor and a public affairs expert.

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Do you have change?

By Siddarth Gore

Moving from cash to a cashless economy
What is your greatest fear while travelling in an autorickshaw? Besides the fear of getting thrown out during a wild manoeuvre, most people are constantly looking at the meter and hoping that it ends in a round figure. I have known cases where people get down a little before their actual destination just because the meter was showing a nice round number. After all, who would want to haggle over change every time and get in a grumpy mood for it?

Now imagine something like this. You get down from the auto and look at the meter. It is staring back at you with say, a dreadful 37.50 rupees. You prepare to fight for each and every paisa of your hard earned money. But the driver doesn’t seem to care. He whips out his phone and enters the amount on it. He politely asks for your phone at taps his phone on it. Instantly you get a notification on your phone saying that Mr. Autorickshaw-wala is asking for Rs. 37.50. You hit accept by validating with your fingerprint and before you have a chance to look up the rickshaw is off in search of its next client. You have not lost any needless time, money or goodwill in the whole transaction. Is this really possible?

And if yes, then in whose lifetime? The answer will surprise you.

The following two trends will give you an indication of where we are heading and why such a scenario is very likely to be a reality in the next 5 years.

[Source: RBI]

The above graph shows a clear trend. India is moving from paper clearing to electronic transfer of funds. And that too really fast. Also looking at the volume of transactions that are happening on the electronic medium suggests that people quickly adopt a new and convenient technology for small transactions first. Once they are comfortable with the new system they are more willing to move the high value transactions as well. This is pertinent in case of e-Wallet since almost all of the transactions there will be of low value. If these numbers are anything to go by on then they indicate that the adoption of cashless peer to peer transactions will be much higher and faster than that of the electronic clearing systems.

[Source: ADC Asia Pacific Quarterly Mobile Phone Tracker, SAP “The Mobile Consumer” Report]

Smartphones are not essential for mobile payments but are much more convenient and safe. The entry of low cost smartphones is leading to a gain of percentage share for them in the market. This is essential for the establishment of payment systems using mobile phones. Latest smartphones are featuring new technologies like NFC (Near Field Communication) and IRIS scan which can be used very effectively for executing payment transactions in a hassle free, secure and fast manner.

Along with the technology where needs to be a mindset change in the population for it to be widely adopted. On that count too India is in a favorable position. In a recent survey conducted by SAP Indians were found to be the most enthusiastic about new and innovative payment methods in the entire Asia Pacific region. This goes further to show that the India economy is ripe for this pivotal change.

But financial services are a tightly regulated sector and things will not change unless the regulators adapt to the changing needs of the sector. In this respect we are lucky to have a very proactive financial regulator like the RBI. It has not only created the required regulatory framework but also by establishing the National Payments Corporation of India (NPCI), has endeavored to create the IT infrastructure that would be required to make such services accessible, secure and inter-operable between all the players involved.

If you think about the above scenario of the auto rickshaw it is not all that different from doing an electronic funds transfer using NEFT. There are however some key differences which make this kind of a transaction possible. Let us peak under the hood and look at what is involved in pulling off our transaction.

First of all you will need a wallet with some money in it. Only in this case it will not be a physical wallet weighing down your pocket but an e-Wallet which will just be an App on your smartphone. The RBI calls it a Pre-Paid Instrument or PPI but we can continue to call it an e-Wallet for ease of understanding. You have already linked your bank account to this wallet and transferred some money into it for your spending today.

You must have noted that you didn’t need to provide your account details anytime during the transaction. And this is a major difference between an NEFT transfer and it is made possible by the Unified Payment Interface developed by the NPCI. When you tap your phone what you send to the other person can be a “virtual address” along with the name of your w-Wallet provider (also called Payment System Player or PSP). The PSP on the receiver’s phone will send this information to the NCPI using the Unified Payment Interface. The NCPI will map this virtual address to a bank account itself (if the virtual address happens to be an Aadhaar Number) or it will send it to the Payee PSP for mapping to a bank account. After NCPI has both the bank accounts it will do a regular electronic funds transfer (much like the IMPS, or perhaps exactly like IMPS) and notify both parties upon completion of the transaction.

The security aspect is taken care by the fact that the information you share with the other person is not sensitive. It can be a number which is valid only for one transaction so it cannot be misused in the future. The transaction also requires you to validate with a password, a pin or a biometric like fingerprint or iris scan. This information is never stored anywhere and is transferred in encrypted form only.

Screen Shot 2015-10-15 at 2.19.58 am[Source: “The Cost of Cash in India” Fletcher]

The economic impact of this transition is huge. India is predominantly a cash based economy. The above estimates suggest more than 85 percent transactions happen in cash. Besides the obvious transaction costs when it comes to cash dealings like carrying of change, risk of theft, fake notes, etc. there is a huge cost of printing and maintaining the paper currency in circulation. RBI estimates put the figure at Rs. 21,000 crore. All these costs will be reduced by moving to a more cashless economy.

Though the regulations are well thought out keeping the safely and security of users in mind, I would like to point out two areas in which they can hinder the large scale adoption of this technology.

First is the requirement for adding a Payee before you make a transaction. This is a tedious process and completely unnecessary for one time transactions like with an auto rickshaw or a vegetable vendor. Perhaps the PSPs can design some clever user experience in their Apps which will circumvent this issue but making this a part of the regulation might make that option unavailable.

Second is the possibility of offline payments. Currently the system is real-time and both the peers need to have data connectivity for the transaction to be successful. Data connectivity is still ramping up in most parts of the country, especially in rural areas, and cannot be relied upon just yet. For e-cash payments to become truly ubiquitous it has to work without network connection. It is unclear if this is indeed feasible with the currently available technology but recent advances in block-chain algorithms and success of currencies like bitcoin are encouraging signs. Let us hope the RBI takes this into consideration and improves upon its policies and infrastructure.

The success of this mission depends largely on the solution providers for the PSPs and their ability to come up with products which are easy to use and interoperable. RBI has shown great understanding of the market while awarding the licenses of payment banks and small banks to players with diverse backgrounds and expertise. It will bring much needed innovation and funds to this critically important aspect of the Indian growth story.

(Siddarth Gore has over 13 years of experience in the computer industry with expertise in networking and embedded systems. He has a Bachelor’s degree in Electronics and Telecommunication from PICT, Pune and a Master’s degree in Computer Engineering from Boston University, US. He is currently pursuing his Master of Arts in Economics from the University of Pune.)

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Bolstering military abilities in Indian Ocean Region

By Sambit Dash

What happens in the high seas in its backyard, concerning India’s national aspirations, is India’s business.  

With 70 percent of the world’s petroleum shipment, 50 percent of world’s container traffic, dependence of world’s two most populous nations for their huge satiety for growth and with an Asian world order establishing, Indian Ocean Region has emerged to be the centre of geopolitical fluxes. This important Sea Lane of Communication (SLOC) however is being used by China to make strategic manoeuvres to encircle India and to assert its hegemony in the region. India, with a geographical advantage, needs to be proactive in order to establish its position as a responsible global power, right signals of which has been shown by the Narendra Modi government.

Indian Ocean Region extends from Australia in the east to South Africa in the west and leading economies of the world China, India, Japan and Australia depend on it. Of late, the docking of Chinese submarines in Sri Lanka and Pakistan, forcing an Indian submarine to surface, building of islands in the South China Sea, forging friendships with smaller Indian Ocean countries, an ambitious Maritime Silk Road (MSR) touted as ‘String of Pearls’ and the massive expansion of PLA-Navy of late has created a buzz of discomfort in India. Strengthening military capabilities should be a prominent feature of the “reverse string of pearl” strategy.



Military Capabilities
India has been fundamentally against militarisation of Indian Ocean. However of late, the massive spurt in growing its military presence in the region, pretty much exponentially, by the Chinese only mean that India needs to build an effective deterrence. Chinese economy and PLA-Navy’s massive fleet are far from India’s reach but backing on better security relationships it has and a regime that has set its priorities in the region, an effort is underway to catch up.

Andaman & Nicobar Command (ANC): This facility overseeing the crucial Malacca Strait through which about 60,000 ships pass each year, is India’s easternmost bastion and has not seen much capacity building since its establishment in 2001. However Indian Navy chief Admiral Robin Dhowan has reiterated that the defence ministry has set ANC as a priority and probably will have a division-level force with 15,000 troops, fighter squadron, more airstrips and major warships. There is a need to equip it with Anti Submarine Warfare (ASW), keeping in view the increase in Chinese submarine excursions. A bold ‘geo-economic vision’, as analyst C Raja Mohan calls it, needs to be realised in this 572 group of island. Additionally for India, ANC can prove to be an example for functioning of an otherwise mired in squabble unified command. India needs to take advantage of China’s ‘Malacca dilemma’ through this strategic point.

Image 2

Shipbuilding: India has 28 shipyards, which thanks to public sector work culture and being stuck in pre-modern era have failed the aspirations of a Navy in need. China has over 800 shipyards and even countries like Vietnam and Phillipines produce quality ships at competitive price. Privatisation of shipbuilding industry needs to be undertaken if India is to make great strides in sea. There are about 2600 ships capable of ocean transport in China which surpasses all others by more than a mile. The new ship acquisition policy announced by Arun jaitley in July 2014, in order to raise India’s home fleet by four times its current capacity, has been a welcome move. Perhaps a policy like China to build new ships fitting specifications by Navy so as to ne ready for ocean transport could be explored.

Dredge: Incessant dredging activity by China and its ‘creation’ of ‘Spratly Island Chain’ and ‘Fiery Cross Reef’, which is against the UNCLOS, and has all machinations for military use, has concerned the international community. India’s dredging industry has been plagued by slow pace of project award and implementation. The Maritime Agenda 2010-2020 pegs an investment of Rs 200 billion by 2020 for dredging and with opportunities which cannot be met by Dredging Coporation of India, forming a policy on dredging and opening that sector to private players could help explore posibilities of extending it to meet military needs.

Aircraft carriers: India currently possesses an ageing and limited capacity INS Viraat which is set to be decommissioned in 2016. INS Vikramaditya is India’s primary aircraft carrier and serves as a statement in the Indian Ocean backyard. India home-grown aircraft carrier INS Vikraant, made by Cochin Shipyard could be inducted in 2017 and the other nuclear powered carrier INS Vishal is in the design phase. While China has two aircraft carriers, one which it built on its own, the building of world’s longest dock at Sanya captured the world’s attention. With the aid of its partner US, which has its 6th fleet in the Indian Ocean, with whom it is set to carry out its 19th war exercise in October, and who sees India as a ‘lynchpin’ in the ‘pivot’ strategy of strenghening its position in the Asia-Pacific, India should speed up the process of technology transfer in building indigenous aircraft carriers.

Submarines: China has 68 submarines and India has 14 and that speaks volumes, if not all, about China’s under sea capabilities. They might be a generation behind the West but suffices to counters India’s posse. India has however attempted to catch up by adding 15 submarines to its fleet, including three nuclear ballistic-missile (SSBN) ones but the key feature is that most of them are built in India itself. This should boost India’s abilities to build more and at home. But an effective strategy to counter China’s huge submarine fleet is to develop anti-submarine warfare (ASW). The current fleet of about 6 ASW aircrafts might pale in front of the Chinese.

Mission Sea-Base: China is keen on sea-basing, a concept where overseas missions can be undertaken without land based command, control and support. It acquired a Mobile Landing Platform in July this year, rolled out its fifth replenishment ship and has made laws for commercial ships to meet naval standards. India’s sea-basing capabilities are negligent however its long-standing naval partner US could help India develop capacity in that regard and that is what India should look for from its strategic partner.

Indian Ocean – the hotbed of activities
A conventional full-scale war may be a thing of past and thus India’s long standing policy of not having overseas military bases may hold good but in a scenario where isolated conflicts and posturing might demand show of power, ‘Places not bases’ strategy would help. In that regard India’s healthy relation with Indian Ocean countries is very important.

India’s maritime focus should be to go beyond A2/AD (Anti Access/ Area Denial). New Delhi has mandated a three pronged strategy for the high seas which involves bolstering submarine capacity, augmenting carrier battle groups and stregthening air power and thorugh its humanitarian and peace-keeping objectives. By the way of anti-piracy operations in Gulf of Aden (incidentally with China) and Operation Rahat in Yemen it has demostrated its intent of a responsible sea power.

India’s naval policy plagued by structural and institutional issues riding on a deep disconnect between Navy and bureaucracy has not espoused great faith in building its capabilities. It will take much more, than the state of affairs presently to put forth a sea-based deterrent vis-à-vis China. A beginning step could be to have a single government agency with the expertise and mandate which would replace the current 14 odd agencies that work in an uncoordinated manner in ocean related matters.

It might be true what the Chinese say, Indian Ocean may not be India’s ocean, but what happens in the high seas in its backyard, concerning India’s national aspirations, is definitely India’s business.

Sambit Dash is a faculty member in Melaka Manipal Medical College at Manipal University, is an alumnus of Takshashila’s public policy course, the Graduate Certificate in Public Policy and writes on public policy, social issues and geopolitics. The views are personal. 

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India’s security relationships in Indian Ocean region

By Sambit Dash

A growing India cannot afford to lose out to proactive Chinese maritime policies.

With 70 percent of the world’s petroleum shipment, 50 percent of world’s container traffic and dependence on energy routes of world’s two most populous nations, the Indian Ocean Region has emerged to be the centre of geopolitical fluxes. In this important Sea Lane of Communication (SLOC) China has been pursuing strategic manoeuvres encircling India and building its ambitious Maritime Silk Route or more fancifully called “String of Pearls”. India with a geographical advantage in the region needs a foreign policy that would thwart China’s perilous designs, a “reverse string of pearls“, signs of which the current dispensation has shown. India’s security relationships in Indian Ocean Region will play a crucial role in stability of the region.

Bolstering economic and political ties with countries on shared objectives even with countries that otherwise receive huge Chinese aid should be in India’s immediate foreign policy focus. The key players in this foreign policy dynamics with stake in IOR are:

Africa: Africa, on a path of colonisation by China, is crucial in India’s policy in the Indian Ocean Region. Set in the western end of IOR, Africa’s allegiance to China, riding on about 222 billlion dollar investment in 2014 by latter (which is three times that of China-US trade) should be a matter of concern for India. Setting up the India Africa Forum Summit (IAFS) in 2008, ushering summit level relationship, has enhanced relation between both regions. However in terms of trade, economic and energy cooperation India needs to catch up with China. The forthcoming India-Africa Summit in October which has seen invitation to all 54 heads of state of Africa, is an apt opportunity for strengthening ties banking on the presence of a huge Indian diaspora and a mutual worldview.

Pakistan: In May of 2015, China docked a Yuan 335 class submarine, having capability of staying under water for a longer time, in Karachi. China is incidentally also selling eight such submarines to Pakistan, while talks for four frigates, six missile boats are on. This development, particularly the docking, which caught India unaware should prompt Indian Navy to bolster its capacity in the western seafront. The strategic location of Gwadar port should also prompt succesful seeing through the Chabahar Port development in Iran which would open India to Central Asia bypassing Pakistan and act as a deterrent to Chinese presence in the neighborhood.

United States of America: India is poised to play a key role in US designs of rebalancing of Asia Pacific. In lieu of Indian Ocean strategy pursuing aircraft carrier technology under India-US Defence Technology and Trade Initiative (DTTI) is a welcome step. India has carried anti-piracy operations in Indian Ocean under Combined Task Force–151 led by the US and has proved its mettle in thwarting pirate attacks. US sees India as a ‘lynchpin’ in the ‘pivot’ strategy of strenghening its position in the Asia-Pacific.

The 19th edition of Indo-US joint naval exercise off India’s eastern seaboard is to be held in October this year which involved Japan in the previous edition. Such exercises in the Indian Ocean, where the 6th fleet of US is stationed, which involves other like-minded nations like Australia and Japan should be carried out regularly to send appropriate signals to the People’s Liberation Army – Navy.

Sri Lanka: Recently being touted as a country that has the potential to become Cuba of India, Sri Lanka is being seen being closer to China than its immediate neighbour India. There has suddenly been a spurt of interest shown by the West in Sri Lanka too given the fact that the post Cold-war lull is getting over and in the small power-big power equations, it is poised to play a strategic role.

The docking of nuclear powered attack submarine in Colombo ruffled feathers of the Indian establishment. This however has not been an isolated incident. The Chinese have been building infrastructure, considered to be of “dual use”, both military and civilian. A change in the overtly pro-Chinese Rajapaksa regime, which had ensured loans of 2.1 billion USD in 2012-14, in the recently concluded elections, should be leveraged by India to gain stronger foothold in this island nation.

Indian Ocean countries: India and Mauritius inked a deal during Prime Minister Modi’s visit to develop Agalega Island north-east of Madagascar for use by Indian military. India’s agreement with Seychelles to build capacity on Assumption Island at northern end of Mozambique Channel will also give Indian Navy much needed strategic advantage. The couple of summits of Forum for India-Pacific Island Countries (FIPIC), with its members India and 14 Pacific island countries held in Fiji in November last year and in Jaipur in August this are welcome especially in the backdrop of huge Chinese aid and presence in these countries.

Geopolitics of the Seas
Other countries that are major players in the game of energy, security and seas are Myanmar, Nepal, Vietnam and Bangladesh. India’s growing dependence on import of energy will require India to play game with various regimes, of different hues, in these countries. A buzz of activities like diplomatic visits and courtesy calls have occurred under the Modi regime and these should be carried forward to meaningful conclusion. Incidences like cancellation of Iran-Pakistan-India pipeline and instead China replacing India in that axis must be avoided.

To counter China’s uneasy experiments in South China Sea India should create a buzz in international forums for China to adhere to UNCLOS, as Indian minister V K Singh did at East Asia Summit Foreign Ministers’ Meeting in Kuala Lumpur. India should also take leadership position in drawing up a CoC (Code of Conduct) which would include risk reduction and conflict resolution in Indian Ocean Region.

Economic growth shall address many of the security relationships issues and it should be relentlessly pursued. Ties with countries having a stake in Indian Ocean Region need to be bolstered keeping Indian national interest paramount. A growing India cannot afford to lose out to proactive Chinese maritime policies.

Sambit Dash is a faculty member in Melaka Manipal Medical College at Manipal University, is an alumnus of Takshashila’s public policy course, the Graduate Certificate in Public Policy and writes on public policy, social issues and geopolitics.

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IITs should be role models in university politics

By Saurabh Chandra

The last thing we need in this country is for politics to become a ‘dirty’ word and people pleading to keep elite institutions away from it.

The recent controversy sparked by the suspension of a little known student group called the Ambedkar Periyar Study Circle at IIT-Madras has again brought to fore the question of allowing politics in universities. The worst fears of the detractors seem to be in revisiting the horrors of the 80s when student politics often led to violence between factions, even leading to murders. Many a times students were used as muscle men by mainstream parties and the local university politics became a proxy for a larger game play.

The concerns are not unfounded but the solution that got employed has been most stifling – complete ban on all political activities on campus. In many cases, the student unions have been dissolved too. My alma mater BHU is a good example where University politics had simply overwhelmed the campus culture. Student politicians would decide not to pass their courses so that they could continue to stand for elections or continue to enroll in masters and then PhD courses in departments where faculty members were also more inclined towards politics than academics. Things went to a boil in the 90s and two students died, post which the student union was dissolved and politics banished from the campus. In the following years, the university got back its academic mojo with multiple faculties climbing various nationwide rankings. In parallel, we created a sterile atmosphere in the university when it came to political engagement and the number of politician alumni from the university is on a fast decline.

This is typical of the blunt knife approach often seen in India. To prevent crimes at night, the recommended approach is to close all shops and advise people to stay indoors. Taken to its logical conclusion: if there were no people then we would have no problems in life. The challenges of university politics need to be solved rather than throwing the baby with the bath water. Violence was an issue in the past and the solution is to impose the rule of law. If academic excellence is the goal of a particular institution then there are many ways to impose that too – mandatory attendance, minimum marks to be a candidate and so on. There is no one size fits all and each university should evolve rules and norms that fit with its culture. Mostly, politics should be like an extra-curricular activity in college that should compete with cultural, sports, literary and other activities in capturing a student’s attention. A bold faculty could even craft its instructional design around political activities.

University politics also provides an easy ramp for new talent to come into the system. For a country so young, it is tragic that the average age of the political class is more than twice the average age of the country. The young politicians are mainly family members of older politicians since genuine challengers from below are in short supply.

The last few years have seen a huge engagement from the student community in the India Against Corruption campaign and then as volunteers for various political parties in the general elections. Both of these events demonstrated the potential that youngsters have in India to contribute to the national political agenda. However, in the absence of politics in the iniversities, we will only see this community in support roles and being utilised by the larger parties or activist groups as ‘man-power’. Genuine leadership will emerge only through the competition and tussle of student politics leading to fresh ideas that provide relief from the same-old of current Indian politics.

The last thing we need in this country is for politics to become a ‘dirty’ word and people pleading to keep elite institutions away from it. If anything, elite institutions should be role models on how politics should be done.

Saurabh Chandra is a tech entrepreneur with an interest in policy.

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What is your most controversial view?

by V Vinay

The next time you meet someone you care about, engage them on this question.

A question I frequently ask students is to share a view which they believe is controversial. The puzzled look on their face is a sight to behold. Many openly admit that nobody has asked them this question. Despite being from the best institutions, many have not even thought of anything remotely interesting and controversial.

One of the primary roles of a university (beyond supplying manpower to industry) is to teach students to think for themselves. This involves another important aspect – that of questioning authority. Universities provide an ideal playground (in the sense of an isolated environment) to learn these skills without fear of

A key necessity for this is diversity. In the absence of conflicting thoughts, there is really nothing to mould. In fact, I would go as far as to say the greatest gift a university can impart to a student is the ability to hold two contradictory ideas without short circuiting their brain.

Political parties (whether in power or not) want followers but not people who question. Discipline and conformity is what parties seek. We are told the Janata experiment failed as there were too many ‘thinkers.’ Even a new entrant with claims of being different, the AAP, cannot support multiple points of view. The Congress enjoys discipline and conformity as a direct consequence of dynastic rule. Add to this a poor country where a degree is a way to get a better salaried life. In this scenerio, conformity is so much more easy on everyone.

The real world is messy. Universities cannot and should not isolate themselves from what is happening around them. However, the cost to being a contrarain voice is high. We may want to pretend the universities are playground but you never know when a bottle is thrown at a player. In a more heated moment, even a pitch invasion cannot be ruled out.

Let us take the recent IIT Madras episode. An anoymous letter is sent. The undersecretary could have ignored it, but didn’t. Instead she decided to ask for comments. The IIT could have ignored the letter or said something along the lines of “we will look into it.” Instead, they decided to act. They could have initiated a conversation with the forum under scrutiny. Instead they unilaterally suspended them. The reaction was immediate: a pitch invasion was imminient. One voice spoke of “touching a nerve” and another of “a civil war”. The ministry smartly washed its hands. Media and political parties jump in to complete the polarisation.

But really, where are the players in the playground? Empty playgrounds is an apt metaphor to much of our elite institutions. They just don’t seem to be engaged enough. Outside, we have a different problem. How can we have an informed debate when all sides give us ready made conclusions? And who is to participate in this debate when we are compartmentalised into one dimension as left or right.

What we need are political conversations in our society and in our elite institutions. Currently this environment does not exist (without grave costs). It needs to be created. As a first step, the directors of elite institues have to isolate the rest of the institute from their political masters. Second, they need to encourage students to open up and state their views, have an opinion, take a stand, construct arguments around it. One possilbe way to do this is to offer a credit and have students discuss current events in the class. (If you already dismissed off the idea, you now know where the problem lies!)

When dissent is no longer a novelty, you are unlikely to have anonymous letters being sent to the ministry.

But what I do not want in elite institutions are political parties creating camps that cannot and will not talk to each other. This may seem like political activity but is really conformity without logic or reason playing a role. It at best makes a dysfunctional campus. This may be how the real world is, but it is not for an institution to mirror reality, but seek to change it.

Let us get back to the need to hold some controversial views. You don’t have to defend 3 times 4 as 12. (Maybe Russell has to, but hopefully not you.) For anything else, you have to articulate a cogent argument to defend your views. Unfortunately most students have no idea how to because they have never been challenged. Let us make a small beginning. The next time you meet someone you care about, engage them on this question.

Indeed I should be asking you: what is the most controversial view you hold which you believe to be true?

V Vinay is a curious academic entrepreneur.

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SV Raju, the Keeper of the Flame

By Sameer Wagle.

It was with great shock that I read Niranjan Rajadhyaksha’s piece in Mint on the day of SV Raju’s passing. What made it worse in a way is the fact that I am currently overseas and have no means of talking to other people who knew Raju. Here are a few of my recollections of him: my humble tribute to SV Raju.

I knew Raju for more than 15 years since I first became a member of the Indian Liberal Group (ILG) in the late 1990s. I continued interacting with him on and off with him over that period first as a member of ILG and then later as an advisory board member on Freedom First (FF). When I moved back to India from Singapore in 2004 Raju persuaded me to join the advisory board of FF with the stated intention to get me more closely involved with the activities of ILG and Freedom first, along with some other younger members.

However, for a mix of reasons primarily related to career which kept me outside Mumbai for a large part of the last ten years my involvement with FF remained more peripheral. In particular over the last 2-3 years when I have been based in Delhi my interactions with Raju has been primarily only during the meetings of the FF advisory board which was held every 3-4 months.

In fact my last conversation with him was in one such meeting with him a few months back at the Ripon club in Mumbai when while discussing the ‘strategy’ for Freedom First going forward I tried to make the point that Freedom First should remain a “specialist” publication focusing on areas related to the liberal cause & history rather than evolving into a general new magazine line publication. After the meeting as we were dispersing Raju patted me, appreciating my intervention and urged me to be more involved. Unfortunately work and family commitments kept me from meeting Raju more regularly and this shall now always remain a regret.

Raju was quite a character with strong views and a bit of an autocrat, though well meaning, as far as running ILG and FF was concerned. Raju was a great story teller and to hear him talk about the history of Rajaji, Masani and the Swatantra party was always a great pleasure.

What I found fascinating about Raju was how dedicated he remained till the very end about making sure that the various activities that he was managing regarding the Indian Liberal Group and the Freedom First magazine were done in a regular and timely manner. The fact that the ILG and FF remained a “niche” group and publication after so many years of hard work must have been a sore point for him but what seemed more important to him was to make sure that that the liberal torch was carried on – through the regular publication of the FF & activities of the ILG.

His dedication and persistence should remain an inspiration for all of us looking to build a better India. Pray that his soul rests in peace.

Sameer Wagle is on the advisory board of Freedom First and an advisor to the Takshashila Institution.

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Geopolitics, economic reforms and the citizen

By Nitin Pai for Loksatta Whistle.

Let us be clear: the world is interested in India because our economy is growing. If the growth process stalls, the world will stop seeing India as a potential solution to its problems. It is important that the world sees us positively this way because that, in turn, creates an environment conducive for our own growth and development.

So, getting back onto a high growth path is as much a foreign policy imperative as it is a development policy goal. Economic power can be converted into military power, knowledge power, cultural power and other forms of power.

India in 2015 has a short window of opportunity to avail of a virtuous cycle of positive demographics, shifting global balance of power and the economics of development. If we miss the bus, it might be several decades before we get another chance.

This is why the goal of completing the process of economic liberalisation is important. It is also why the task of reforming the government to make the Indian state more competent is important. It is wishful to believe that either of these goals can be achieved by a citizenry that is narrowminded, parochial, illiberal and chauvinistic.

If economic and governance reforms are in the domain of political leaders, personal reforms are very much in our own hands. Can the politically awakened Indian citizen hold fast to the enlightened values enshrined in our Constitution? Let’s use the opportunity to reflect on this.

Author is co – founder and director of the Takshashila Institution, an independent think tank and school of public policy.

This piece was first published in Loksatta Whistle.

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The eightfold path to unlearn public policy paradigms

What are the eight things to unlearn in order to appreciate policymaking better.

by Pranay Kotasthane (@pranaykotas)

If one wishes to learn about public policy in the Indian context, there are several great pieces to refer to. For instance, Ajay Shah’s blog post Become a public policy thinker in three easy steps or Nitin Pai’s The eightfold path to transforming India are great starting points. However, as someone newly initiated to this field, I am interested in finding out what we need to unlearn in order to appreciate the intricacies of public policy. And based on my observations there are eight paradigms to let go of. This eightfold way of liberating oneself is given below, arranged in no particular order.

Paradigm 0: What I know is golden, so I can’t let go of it.
The zeroth step of course is being open to the process of unlearning. We come with our own biases, shaped by our varied experiences and perceptions. But our experience or knowledge is not be the way the entire world functions. An unrelenting hold on what we have learned is the equivalent of the sunk cost fallacy in economics.

Paradigm 1: Good intentions translate to good policies.
I defer to an inexact analogy here. Good motive is like the potential energy of a stone resting on the edge of a cliff. The stone has the capacity to get work done by virtue of its position. A good policy on the other hand is like kinetic energy of this stone falling off the cliff. Kinetic energy is the capacity to get work done by virtue of motion. Similarly, a good policy has the capacity to get things moving towards the desired outcomes. Just as both forms of energies have the capacity to get work done, good intentions and good policies also have the capacity of accomplishing objectives in public policy. But this by no means implies that they are same. Conversion of potential energy to kinetic energy requires a conservative force to act on it.  Similarly, good intentions need lots of conscious effort before they are ‘converted’ to a good policy. Moreover, the stone resting on a cliff also has the potential to kill if it falls on an unsuspecting passerby below. Similarly, good intentions alone can lead to negative externalities and even lead to an erosion of moral values. For example, the Morarji Desai government in 1977 ordered a prohibition on alcohol with the ‘good’ intention of improving the health of the citizens. But this ban turned out be a disastrous policy, leading to deaths due to spurious liquor, and the subsequent rise of organised crime like smuggling and money laundering, all having roots in the black market of alcohol. So good intentions does not equate to good policies.

­­­­Paradigm 2: The codes of morality that apply within a nation-state should also apply to the conduct between nation-states.
Trying to figure out the ethical dimensions of a US attack on Iraq or Afghanistan is a moot question to ask because the rules of the game differ according to the context. The morality of a nation-state within its boundaries is in most cases, based on a document like the constitution which every citizen and the government is expected to adhere to. A deviation from the principles of constitutionalism is thus considered wrong or inimical to the interests of the nation as a whole. On the other hand, the rules of the game that apply to international affairs and geopolitics are completely different. There is no constitution or a written code of conduct here. Instead, the fundamental law which applies to international relations is that of power.

Paradigm 3: India’s bane is that while the policies are good, their implementation is bad.
A policy that does not envisage its implementation is, in fact a poor policy to start with. Though one needs to discount the time scaling challenge that all governments face, a policy that remains oblivious to the implementation aspect is no good either.  The word implementation is often seen in terms of enforcement capacity and perceived stakeholder attitudes, two variables which are both prima facie known (even if not accurately) before a policy is made. Thus, a policy that does not envisage the role of these factors is by definition an incompetent policy.

Paradigm 4: Certainty and consistency of views over a long period is a hallmark of good policy analysis.
Stephen Walt, professor of International Relations at Harvard University has written a brilliant piece where he offers the Top 10 things he was wrong about and admits to a change in mind on these matters.  Such humility and lack of certitude is, in fact a boon for policy makers. If empirical evidence proves otherwise, one must replace their deeply held beliefs. And as some great economist (allegedly Keynes) once claimed — “When the facts change, I change my mind. What do you do?”

Paradigm 5: Economics is about picking your poison—capitalism or socialism.
Economics is the bedrock of good policy making. It is the science behind the practice of policy making. The subject, at its core, seeks to understand the study of human behaviour. Economics is certainly not about eulogising the patron saints of economic theories, whether it is Karl Marx or Adam Smith. As long as our efforts are aimed at substantiating why, and how human beings behave, we can aim to have policies that can build the right incentives, nudges or restrictions. Being wedded to an economic theory in the face of contradictory evidence is repeating the folly described in Paradigm 4.

Paradigm 6: A government should be target all its energies at the most disadvantaged section of the society.
More often than not, change happens at the margin. For example, economic reforms initiated in the early 1990s greatly improved the lives of many people in India. But these reforms helped people at the margin — the ones who had access to at least one of three things — money, education or skill. The reforms could not substantially turn around the lives of sections which had none of the three prerequisites. A government can change the lives of many more people at the margin with a lesser effort. This certainly does not mean that governments should ignore those below the margin, but it is equally improbable to expect rapid changes with a one-dimensional strategy. Let the best not be the enemy of the good.

Paradigm 7: What works for me works for everyone else.
Difficulties of perception and memory lend themselves to different cognitive biases to different people. Not all people see the world in the same way and hence do not respond to the same incentives as I do.

Paradigm 8: Politics is a contestation for ideological dominance.
Ideology is just one of the many factors that shapes political opinions. A better definition of politics is that it is a contestation for narrative dominance. It is thus not surprising that it is often the narrative that wins before a party or person does. And since politics is a contestation for the dominance of a narrative rather than an ideology, those who are stuck in ideological silos often end up having egg on their face.

This, I submit is the eightfold path to unlearn and liberate oneself from the bondage. And this in my opinion is the entry point into the world of policy making.


Pranay Kotasthane is a policy analyst at The Takshashila Institution. He is on twitter @pranaykotas

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Shivaji Asaa Hota — This is who Shivaji was…

A review of the Marathi book ‘Shivaji KoN Hota’ which says that instead of a hollow invocation of Shivaji, it would bode well if we understood his life, his achievements and his struggles.

by Pranay Kotasthane (@pranaykotas)

Screen Shot 2015-03-03 at 1.16.05 pmPossibly because they can no longer speak for themselves, historically important individuals are susceptible to massive distortions of their thoughts, actions and lives. This process of weaving myths around a historical figure holds particularly true in the case of Shivaji Shahji Bhonsle, the 17th century warrior king who went on to establish a formidable Maratha empire. It is with this aim of decoupling history from the prevalent demigod image of Shivaji that the CPI leader Govind Pansare gave a speech Shivaji KoN Hota? (Who was Shivaji?) way back in 1987. This was later published as a book and has been a Marathi super hit—the 38th edition of the book was released recently.

This book puts the life and times of Shivaji under perspective. The work is not as much a biography of Shivaji as it is an attempt to debunk the myths surrounding Shivaji. It begins with the question—of what relevance is the life of a feudal king in a democracy? Pansare says that although Shivaji was essentially a part of the 17th century feudal society, it was his vision that set him apart from the other rulers. First and foremost, Shivaji was a great state builder. Starting from a small paragana around Pune, he created a formidable political rule that extended throughout Maharashtra and beyond. Second, Shivaji was an administrative reformer. He modified rules of the tilling system in order to benefit the ordinary peasant. Unlike other rulers, he was able to break the traditional control of the Deshmukhs (highest local authority in a village), the Patils (a title for village chiefs), the Kulkarnis (village record keepers) and other dominant classes. Because he was able to break this nexus, he introduced land reforms that put an end to the discretionary exploitation by the village power elite.

In an interesting section of the book, Pansare debunks the myth of an idyllic 17th century village. He contends that before Shivaji’s rule, the king had no control or an interest in the operations of the village as long as the share of taxes duly reached the state coffers. The village economy was largely self-sufficient and exploitative. Under Shivaji’s rule however,  the administration was centralised. Taxes reached the state first and were then devolved to the village levels.  Moreover, the 17th century was particularly miserable for women. Physical exploitation was common and there was no appellate mechanism against the village elite. This changed in Shivaji’s administration. Pansare cites an instance where, for the first time a landlord was punished for the rape of a village woman. There was also a prevalent practice of women being employed as concubines for the soldiers of a travelling army. Shivaji prohibited that practice, disbanded a standing army and encouraged soldiers to take up other part-time occupations in order to retain stronger family ties.

The author’s take on the destruction of temples by invading armies merits particular attention. The conventional revenue earnings for armies came as a proportion of the loot. Hence, armies had an inbuilt incentive for maximum pillage while conducting raids. Naturally, temples which also functioned as wealth banks came under attack during such raids. Destruction of temples also served as a demoralising weapon—if the ‘God’ could not protect itself from an invading army, of what use was resisting such a powerful force? It was for these reasons that, regardless of religion, both Hindu and Muslim armies targeted temples. This is quite the opposite of the present day narrative where a few rulers have been singled out for destruction of temples. The author gives the instance of the Sharda Sringeri Temple which was in fact destroyed by the ‘Hindu’ Maratha army and was rebuilt by the ‘Muslim’ Tipu Sultan. What Pansare says is that the basis for statecraft was a conquest for rajya, and not dharma. Once the conquests were completed, there were several instances of kings rebuilding temples in order to assuage their subjects. The author says that even Aurangzeb rebuilt the Jagannath temple in Gujarat besides other important worshipping sites in Mathura and Benaras.

In recent times, the totem of Shivaji has been raised by many Hindu extremist outfits, calling him a Hindu ruler who stood up to the Muslim Mughals. Slotting Shivaji in neat compartments of religious dichotomy is factually incorrect. The book has excerpts of letters by Shivaji which are rich in Persian/Urdu words — like julum, farman, mulaaqat etc. Shivaji also issued ordinances disallowing destruction of mosques and temples.There were many Muslims who were happy with his rule just like many Hindu kings who collaborated to undermine his rule. Again, the message is that the basis for statecraft was a conquest for rajya, and not dharma.

The author rues that today, a cult of Shivaji has formed. Groups of people formed along caste and religious lines calling themselves shivbhakts are not difficult to spot in Maharashtra. However, what is conveniently forgotten is that Shivaji faced severe opposition from caste groups (96 kulis), who refused to be ruled by a person belonging to a caste ‘lesser’ than their own. But today, in their quest for narrative dominance, Shivaji was first appropriated by Hindu nationalists, then he was appropriated by various Maratha groups and then as a Gobrahman Pratipalak— the protector of the cow and the brahmin.

The problem with this competition for appropriation of Shivaji’s legacy by a religion, region and caste has been that while Shivaji was a very popular figure in many neighbouring states 50 years ago, his legacy has now been confined to Maharashtra. Pansare says that it is important that we distinguish the real shivbhakts from fake ones. Transforming a human to a god figure is easy because once a human is made a god, one disposes himself of the responsibility of changing his own behaviour. How can one emulate God, people ask. This is what we should be wary of. Instead of a hollow invocation of Shivaji, it would bode well if we understood his life, his achievements and his struggles. The lesson for all of us is that any nationalism obsessed with exclusion finds it difficult to limit the extent of the exclusion.

After all, history and mythology are separated by a thin, semi-permeable membrane. History enters the domain of the myth when historical figures are transformed into demigods, armed with superpowers. At a latter point, reason, as a means to gauge their power becomes dispensable and their lives attain an axiomatic character—beyond enquiry and too great to be analysed logically. We need to be extremely wary of this process which prohibits us from the spirit of questioning.

P.S.: Govind Pansare was killed by unidentified assailants in Feb, 2015

Pranay Kotasthane is a policy analyst at The Takshashila Institution. He is on twitter @pranaykotas

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