India's Reaction to Kobhragade Arrest - Excessive, Unbecoming of an Aspiring Superpower

If you belong to a party that just lost assembly elections in four out of five States and are increasingly poised to loose the General Elections in 2014 in a humiliating fashion, all you wish for is an episode such as Devyani Kobhragade's arrest. It presents to you an enticing opportunity of appearing tough, shifts the discussion from corruption and governance to that of hurt pride and seek revenge even if such a reaction may not be the ideal thing to do for an aspiring superpower.


Similarly, if you happen to be a leader of the BJP that just won all of the four elections and is expected to win the 2014 General Elections, you are left with no choice but to search for a tougher line than your opponent, howsoever ludicrous, even if it may undermine the foreign policy your previous government and leaders worked tirelessly for.

And of course, if you happen to represent the most despicable face of India's identity based politics, you make it a Dalit issue and hope enough of your followers remain dumb enough to keep voting for you. Mayawati, obviously did not know that Devyani Khobragade achieved a rank of 168 in her civil service examination which does not get you into the IFS unless you happen to enjoy the special privileges of belonging to the SC/ST category.

The above largely sums up why India (The Government, Media, Social Media and the Chattering Class) reacted the way we did on the arrest and strip search of a diplomat by the US. Cheap domestic political interests overpowered the larger foreign policy interests of the Nation.

It goes without saying that the treatment handed out to our diplomat was heavy handed and we needed to express outrage and take it up strongly through the official channels. But by stripping down the security barriers, taking away diplomatic privileges of the American consulate members, imposing a ban on import of food and liquor for the embassy staff, raising calls for arrest of homosexual partners of the embassy staff and our leaders refusing to meet the visiting American delegation, we have ended up far exceeding American Arrogance with our stupidity. The way American police reacted is of course not how you treat the diplomat of any country, at least not that of a country you project as a strategic ally but you also don't act the way we did when you keep staking your claim to be the next superpower and a permanent member of the UN Security Council.

Devyani Kobhragade is a seasoned bureaucrat having been in the IFS since 1999. She is the daughter of a retired IAS officer. She, of all people, must know not to violate the law of the country in which you are posted. When you declare 11 immovable properties on your profile including an apartment in the Adarsh Society and happen to be the 2nd highest ranking official at India's Embassy in the US, the least you should be able to afford is to pay minimum wage to your baby-sitter. You decide not to do it because at some level you believe yourself to be above the law and consider a domestic help helpless. Or perhaps because you could use all your political connections and might in evading prosecution in the Adarsh Society scam, you tend to assume immunity for acts of corruption.

Devyani moreover is not the first Indian diplomat to have exploited their domestic help in the US. We have had two of our high ranking diplomats in US accused of the same in the recent past, one having been ordered to pay as much as US$1.5 million in penalties.

Washington Post (Link) , New York Times (NYT Link) and Financial Times (FT Link) have published their opinion pieces on the events largely holding India at fault. Their editorials are read by global audience which helps shape the perception of our country overseas. The image that emerges of India from this episode is of a country that does not care or respect the laws and is willing to throw its weight behind the dignity of a dishonest diplomat while showing no concern to the plight of the domestic help who may be the real victim here. Salman KHurshied in his interviews on the television dealt another blow to our reputation by saying our diplomats underpay the domestic helps all the time and that is not really bad. His interview paints the image of us as a country where as long as violation of a law happens all the time, it is OK and while law may be same for everyone in letter, its implementation is different for different people.

Germany didn't react the way we did at the news of US spying on Merkel. Even we didn't react the way we have done now when Snowden's leaks showed NSA spied on Indian Embassy. The reaction this time is purely an outcome of political posturing for garnering momentum at the cost of jeopardizing foreign policy. Our leaders do that all the time - we have lost an ally in Sri Lanka due to Tamil Politics at home and we are increasingly loosing allies in our neighborhood for lack of vision and tactical oversight in our foreign policy setup.

Once again, I am not saying what US did was right - they could have asked India to remove Devyani or accorded her more courtesies before putting her through an arrest. A strip search could have clearly been avoided. But our reaction has clearly absolved the US from its misconduct. The US government can express regret for the cause of larger relationship while their legal system keeps its head high for passionately defending the law of the land. We on the other hand emerge as a country that claims to be a superpower in the making but plays the victim card at the slightest of opportunity. Perhaps our government, politicians and media would do well to realize, it pays to be tactical and strategic in foreign relations rather than oscillate between being a lap-dog or a wild cat.

Another Rape in Delhi and Gun Violence in US conclude an 'Outright Depressing' 2012

2012 has been an outright disappointing year. A latest event each in the two countries I am physically and emotionally affiliated with sum up the disappointment and outrage I have felt many times during the course of the year.

A young woman got raped, beaten and thrown out of a moving bus to die on the sidewalks with her boyfriend who too was physically crushed in the city I call home, Delhi. This was not an isolated incident. This was the 10^th such instance of rape in a moving vehicle and one of 550 rape cases that are reported in Delhi each year. We have seen a medical school student raped in broad day light and we have seen several working women raped on their way back home from work. Response of police and politicians remains the same - the victim must have done something to invite the brutality upon herself.

Our three term Chief Minister (CM), most likely to be fourth term, has made outrageous comments every time a case is reported. This time, her reaction was to proudly report cancellation of the bus license and direct further queries to police. Public outrage forced her to dispassionately suggest several policy actions and constitution of a committee to recommend action. In past, she blamed the murder of a female journalist upon the murdered victim  herself as she was being too adventurous to be out at 3 in the morning. Her idea of instilling a sense of security among women in Delhi – women should not work; if they necessarily need to, to make ends meet then they must be home before dark; they should preferably have a male escort and not use public transport. 

I would however be naive to suggest better enforcement can eradicate Delhi’s rape problem. Rot runs much deeper into Delhi's society. Lack of empathy, widespread incivility, pompous mindset, an undeserved sense of superiority and omnipresent political and bureaucratic corruption that has driven people to stop fearing the law, are as much to blame for the rape problem.

Unlike Mumbai where a hard working lower middle class incumbent is content in the surrounding of mega rich, his Delhi counterpart harbors a feeling of contempt and envy towards the affluent. While working harder is key to success for this Mumbai man, his Delhi counterpart sees it as a zero sum game, trying to push someone down to rise up. While people in Mumbai appear cold and indifferent on the outside, they have a genuine sense of compassion. People in Delhi appear warm and friendly on the outside but are often found lacking genuineness. One thinks before committing a crime in Mumbai for the fear of the parallel justice system that I believe runs stronger than police. In Delhi no system exists except the system of corrupt connections everyone happily flaunts. This is a very broad generalization but having lived in both the cities, the differences stand out and reflect in each city's status as the safest and most unsafe city for women in India.  

Delhi is my home, a city I so much love for the history, food, diversity, open spaces and several top universities. It hurts me that Delhi is firmly acknowledged as the rape capital of India. The disturbing lack of empathy from the executive class and police coupled with the deep societal flaws hurt me even more as there does not appear to be a near term fix to this most inhumane of all crimes.

Second event took place a week back in the country I currently live in. A mentally ill young man with easy access to guns rampaged his way through an elementary school killing 20 innocent children and 6 adults. This again was not an isolated incidence. A few weeks back, a pro football player shot his girlfriend and then shot himself. Before that, there was the Colorado shooting in a movie theater killing 12 and injuring 58. There was the 2011 Tucson shooting where congresswoman Giffords was shot. 

There are over 32,000 deaths each year due to gun violence in the US. 40% of the gun sales take place without background checks. There is easy access to those denied legitimate sale in the second hand and black market. Web sites and blogs promoted by the gun industry provide assembling manuals for those ineligible to buy guns so that they can rather by spare parts and assemble one themselves. Gun markets are organized just like Christmas and Halloween costume markets. Civilians have access to automatic weapons. 

Everyone knows what needs to be done but a small minority of gun fanatics (aprx 4 million members pay monthly membership to the NRA) and their collective lobbying power outweighs the collective conscience and will of the rest of America and her politicians.

NRA brazenly held a press conference today to make a pitch for even more guns in the street, recommending the country be transformed into a curfew-ed war zone to protect children and innocent civilians. President Obama arrogantly responded to a reporter who asked, ‘where you have been on this issue’ as I have been the President of the United States overseeing the worse economic recession since the Great depression. Quite clearly human lives matter less than economy.  He conveniently forgot to mention he was busy campaigning for more than a year to get reelected and is still campaigning rather than get his hands dirty and try solving many issues this great country faces.

Republicans quite shamelessly continue to beat their trumpet of protecting the constitutional right to bear firearms no matter what. Their key argument being guns don't kill people but people kill people. That way, even weapons of mass destruction (WMD) don’t kill people but people who operate those WMDs kill people.  Sounds ridiculous enough I know but tune into fox news or read gun right blogs for the most outrageously ridiculous arguments in favor of guns.

I can only hope with my sincerest of wishes that 2013 be a better year.

Need for a Transformational Change in Fuel Policy not Random Pricing, Rationing, Inefficiencies and Corruption

As always the news of fuel price hike was met with much criticism across the political aisle including those of the ruling government's alies while social media was abuzz with creativity in showing the effects of such a hike. My favorite was a marketing pitch for petrol sachets.

Keeping the criticism of the masses and my personal belief that government must get out of industry keeping no role to play in setting fuel prices aside, increasing diesel prices and reducing excise on petrol was for once a sensible decision taken by the government.

I broke down the cost of petrol in my earlier blog (Read Here) - c. 40% of the retail price of petrol is made up of Cental and State taxes. These high taxes on petrol have long been put justified in the disguise of cross subsidizing diesel, kerosene and LPG. This cross subsidization however serves no purpose. Cheaper diesel has led to proliferation of diesel run passenger cars and SUVs cuasing unreasonably high consumption of diesel. Diesel as we know is an extremely high polluting fuel compared to petrol. Kerosene on the other hand has been rampantly adulterated with petrol causing engine and environmental damage while creating another avenue for black money in the system. Reduction of central excise on Petrol by 5.3 a litre is therefore a step in the right direction. Increasing the price of diesel is certainly going to lead to a slight jump in inflation across the board but we cannot always escape the hard reality of global markets where crude prices have jumped more than 30% in last 3 months due to speculation and middle east uncertainties. 

Only way to manage price stability is for the oil companies to effectively and opportunistically use hedging instruments which would never happen as long as they are government owned and dont have any incentive to improve efficiencies and compete in an free market environment.  

Turning to no price hike in kerosene - in a fractured coalition and messy democracy like ours, it is more or less blasphemous to expect an increase or rather rationalization of kerosene prices. Black marketing of kerosene has become so intertwined with the corrupt political system and bloated bureaucracy that no one would ever dare plug the spigot that feeds politicians' and middlemen's Swiss accounts. Narasimha D Rao of 'International Institute for Applied Systems Analysis' concludes in 'Energy For Sustainable Development' March 2012 issue, 'kerosene subsidies are regressive and of minimal financial value to poor rural households. This is in part because household quotas are based on cooking needs, but kerosene is used predominantly for lighting. In urban areas, subsidies are progressive, and provide benefits of up to 5 to 10% of household expenditure among poorer households which lack affordable access to LPG and biomass. Overall, only 26% of the total subsidy value directly reaches households'. Another study was more liberal to the government and mentioned c. 40% of kerosene is stolen and never reaches intended beneficiaries.

Based on this, kerosene subsidies are the biggest and longest running scam India has ever seen still going strong. Based on mid point of this 74% and 40% loss estimated by the two studies mentioned earlier and last years subsidy of $4 Bn, here is $2.3 Bn in corrupt money warming politicians/middlemen pockets annually.

I dont want to sound an environmental activist here but common sense thinking would suggest a better policy would be to give intended beneficiaries access to cleaner cooking and lighting options than subsidize what is quite clearly the most inefficient, environmentally disastrous and unhealthy option.

The decision to limit LPG cylinders at subsidized rates to 6 per family however was an antiquated and intellectually bereft decision that one has compromised to expect from this government headed by a renowned technocrat. A two tier pricing structure often leads to a black market. Indian scam-artists' and local politicians' ingenuity would right away lead to a flood of bogus gas connections and quota on those bogus connections would make it to genuine middle class families at 600 a piece compared to the full priced 750 cylinder. Families would be waiting for a long time to get their subsidized cylinders while the 600 a pop would be available instantly. So wait and watch as this latest experiments makes many millionaires while housewives tackle yet another complication in their already stretched tiger mom inspired life.

I would prefer a policy that eliminates all the subsidies on LPG, petrol, diesel and kerosene in return for elimination of import duty on crude, reduction in all central government taxes to the minimum bracket and incentive to private sector to invest in building pipelines and efficient refineries. Inefficient refining adds c. 1.5 a litre to price while inefficient trucks based transport and vested interests in dealer network and marketing adds another 4 bucks of inefficiencies. I would have added investment in public transport to this wish list as well but that would make me an eternal but naive optimist. The wish list above makes me more or less an enemy of socialists but keeps me among sane eternal optimists nonetheless.

India's Competitiveness - A fall of 10 places from 2009-2012

If the news of GDP growth slowing to 5.5 pct last quarter was not bad enough, India's competitiveness in 2012 dropped 3 places to 59.

Quoting from the report:

• Since reaching its peak at 49th in 2009, India has lost 10 places. Once ahead of Brazil and South Africa, India now trails them by some 10 places and lags behind China by a margin of 30 positions.
• The country’s supply of transport, ICT, and energy infrastructure remains largely insufficient and ill-adapted to the needs of the economy (84th).
• The picture is even bleaker in the health and basic education pillar (101st). Despite improvements across the board over the past few years, poor public health and education standards remain a prime cause of India’s low productivity.
• Once ranked a satisfactory 37th in 'Trust in Institutions' dimension, India now ranks 70th driven largely by lack of trust in politicians (106th).
• The macroeconomic environment (99th) continues to be characterized by large and repeated public deficits and the highest debt-to-GDP ratio among the BRICS.

Despite the above, report does point out a couple of strengths:

• Fairly well developed and sophisticated financial market (21st) that can channel financial resources to good use.
• Reasonably sophisticated (40th) and innovative (41th) businesses.

The decline in competitiveness should come as no surprise to anyone given that the current government has been focused in carrying out and then managing the fallout of scandals failing to push through any meaningful reforms, especially in the last 3 years during which we lost 10 places in competitiveness.

In the recent past, we have seen corruption at an unprecedented scale (Commonwealth games, Defense procurement, 2G, Coalgate, Thorium etc), widespread failure in the running and maintenance of existing infrastructure (grid failures, T&D losses, coal mining below potential, railway accidents etc), repeated delays and cost overruns in infrastructure projects (Bangalore Metro, JNPT upgrade, Delhi Mumbai Industrial corridor, numerous power plants and the list can go on) and policy and regulatory gridlock leading to delays and uncertainty in private sector and FDI ($12 Bn Posco steel plant, $9 Bn Mittal Steel plant, multi-billion dollar Himalayan Ski Village project near Manali, Vodafone tax dispute, renegotiation of Mauritius tax treaty. FDI in retail etc). 

Incompetence of this government is so widespread that finding adjectives to describe the tragic state of affairs is difficult. Times Magazine's portrayal of Manmohan Singh (MMS) as an 'Underachiever' and Washington Post's description of him as a 'Tragic Figure' can be characterized as a mild judgement at best. It does not come as surprise that the day India dropped 3 places in competitiveness, this Government was demanding an apology from Washington Post for labeling MMS as 'Tragic Figure' and trying to push through a bill that would kill little remaining meritocracy among government employees.

Reports highlight of the two areas of strength also do not come as a surprise. Reserve Bank of India (RBI) is the only institutions that has managed to remain independent and take tough and independent decisions regarding bank supervision and conduct of monetary policy. While one could argue RBI has been painfully slow in opening up the banking sector to foreign competition and launch reforms that would create a corporate bond market and foster efficiency, it could not be denied that RBI has managed the monetary policy impeccably despite governments push to keep rates low, supervised banks diligently to limit credit risk and been pragmatic in helping them manage cyclical risks in a downturn.

Similarly the vibrancy of our private sector is a hallmark of our culture that places a lot of emphasis on hard work (talking about work life balance is more or less still taboo), education, mobility and most importantly to learn to succeed despite the government.

I am eager to see how long the party continues on these two fronts given that private sector is beginning to feel more and more disenchanted with lack of infrastructure and an extremely inefficient judiciary coupled with an uncertain regulatory environment while government is eager to get RBI into its fold to pander to minorities (islamic banking), direct lending to its cronies and manage an ever growing deficit at low rates.

Urgency for a 'Uniform Common Civil Code' in India.

Three recent instances in the past week highlight the urgency for a ‘Uniform Common Civil Code’ in India.

Delhi high court in a recent judgment held the marriage of a 15 year old Muslim girl to be legally valid, rationale being the validity of such marriage under the Shariah Law. Under the Shariah law, as long as a girl has attained puberty, she is eligible to be married. In the eyes of the High Court, the Shariah Law supersedes other laws wherein legal age for a girl to get married is 18 and sex with a girl younger than 18 is punishable under the criminal law as statutory rape. Predictably, the All India Muslim Personal Law Board welcomed the ruling.

In an unrelated but coincidental incident, the Home Ministry at the Central level asked State Governments to try and post Muslim Police officers in areas with high Muslim concentration. One could only hazard a guess on what prompted this directive but a common sense interpretation would be that Central Government believes it is hard for Muslims to trust Hindu police officers and therefore they need to be put in hands of officers who share their faith.
In the last but probably the most significant incident, the Minorities Commission (read Muslim Commission) asked the government to allow Islamic Banking. RBI had earlier opined that Islamic Banking is not possible under the current regulatory framework. Finance Ministry has apparently asked the Central Bank to amend the regulatory framework to gradually allow roll out of Islamic Banking.

These three incidents highlight the fragility of our society and intellectual bankruptcy of our political system. Our constitution rightly recognized India as a secular country where everyone was free to practice any religion. Our constitution however stopped short of imposing a Uniform civil code on all fearing widespread religious riots. Through multiple articles, the Constitution deferred provision of a uniform civil code to the future generations and left resolution of conflicts between personal (religious) and national laws to the interpretation of judiciary.
Passage of Hindu Marriage Act and various other codes secularized all communities in India and brought them at par with the modern times. Muslims were the only sizeable community that did not agree to any sort of reforms and remained outside secular code. Reason being; mainstream politicians (read Congress Party) saw an uneducated, poor and antiquated Muslim community as a perfect vote bank that could be exploited forever while the guardians of the Muslim community (the Muslim Law Board and various other Muslim representative bodies) saw a large Muslim population living in the gilded age as passport to disproportionate power and influence and unending source of illegitimate money.

Whatever the argument may be for the Muslim community to be still living outside the purview of common law, the reality is we might now be entering a point of no return. If some of the State Governments are to indeed start policing Muslim areas with Muslim officers, would it be too farfetched to expect Hindus to disregard Muslim officers and vice versa on a much larger scale. Similarly, if a 15 year Muslim girl can be legally married, who would have the motivation to zealously go after underage marriages among Hindus and pursue those self proclaimed jurors (Khap Panchayats etc) seeking to enforce the ridiculously ancient rules regarding marriage, divorce and treatment of women among Hindus. Further, if Muslims can have Islamic Banking, what moral authority would the State have in preventing other religion or community based institutions that strictly design and provide services along such lines.
These are not isolated incidents. Our politicians and self-serving minorities’ commissions are using democracy as a tool to deepen the divide along religion, caste, language and regional lines. Rather than talking about gradually phasing out or restricting reservations, we are debating reservation in the Private Sector and extension of reservations along religious lines. We still frequently have riots for divisions and renaming of States and Districts along various allegiances when the real focus should be for growth and development.

It is time we demand a uniform civil code for everyone that is based on universally accepted principles of human dignity and take religion out of the State. Uniform civil code is the first step in unifying and creating a modern civil society that is the most fundamental pre-requisite for well-functioning of a democratic system. I know it is easier said and immensely difficult to be done but if we do not start the conversation now, we may well have passed the red line and the price to be paid to bring about the correction may turn out to be prohibitive or just way too high.

Petrol Prices - why Indians pay so much more

Indian consumers pay 70% more than Americans for fuel after yesterday's price hike. We pay significantly higher than our next door neighbors - 65% more than Pakistanis and Bangladeshis, 20% more than Chinese and 50% more than Sri Lankans. So, to understand why we pay so much more, let me try break the aprx cost of Petrol in Delhi:

Base Crude Price: 32.0
Cost of refining plus profit margin - 6.5
Transportation - 6.0
Dealer commission - 1.5
Central Govt. taxes (custom and excise) - 16.1
State Sales Tax - 12.0

Total price - 74

So, we pay almost as much in taxes as the base crude price. We are told these high taxes on Petrol are required to subsidize kerosene and cooking gas and contribute money for highways. Kerosene subsidy we all know is a cruel joke that perpetrates corruption and screws up our engines as retailers mix kerosene into Petrol to make money and pay their political godfathers. Highway tax of 2.5 a litre - well lets just say highway ministry is a hot ministry for a reason. Cooking gas is where it gets interesting. Assuming an average middle class family burns 50 litres of petrol every month, it ends up paying 1400 in taxes every month. My guess for average consumption of cooking gas would be around one cylinder per month. So, our government has successfully scammed us into paying 1400 per month to receive a subsidy of 500.

We end up paying close to 40% of fuel costs in taxes. This is the highest incidence of fuel tax outside of Europe where fuel taxes average around 50%. If one were to make an argument that government needs to tax petrol to promote social equity or protect environment, then I would humbly submit that Petrol is a basic necessity for almost everyone, not a luxury. As for environment, lets not forget European governments first invested in building an efficient and affordable public transport system before discouraging private transport. Our public transport infrastructure is probably the worse even among comparable emerging nations. Sometimes I believe it exists for the daredevils or those who just don't have any other option. There is a reason why vast number of people drive on motorcycles and scooters in temperatures as high as 45 degree Celsius and risk their lives by jamming in 3, even 4 on them - they would rather not risk their life on a Delhi bus or Mumbai local.

Price controls and state ownership of the Petroleum sector has done nothing to help the poor but has created a vast spectrum of vested interests that provide no incentive to improve inefficiencies, repress competition and promote corruption. Consider this - cost of refining (incl refining margin) in India is in excess of 6.5 rupees a litre while the comparable figure in the US is slightly lower than 5 rupees a litre. Does it make any sense. In India, refining costs and margins remain broadly the same as no one has incentive to improve efficiency and take a hit on profits for any competitive reasons. Further, compare the cost of distribution, marketing and dealer profits - it averaged around 3.5 rupees a litre in the US while transportation and dealer margin in India average close to 7.5 a litre. This is a direct result of lack of investment in building pipeline for oil transportation. India transports aprx 34% of petroleum products by pipeline while in US, this proportion is 66%. Pipelines are the most efficient and cheapest mode of transporting oil but this is again a sector dominated by the State and no wonder not much has happened.

It is time we start asking the State to withdraw from price controls and let market forces do their job. In any event, market forces cant be worse than current state of affairs in this industry.

Corruption and Culture - A vicious circle India must break

Abigail Barr and Danila Serra, as a part of the Global Poverty Research Group, concluded in their brilliantly written paper on 'Culture and Corruption' in 2006 that 'Corruption is in part, a cultural phenomenon'. Their sample of 195 experimental participants originated from 43 countries ranging from some of the most to the least corrupt countries and included 4 participants from India. An interesting conclusion of the experiment was that there exists a significant positive correlation between the level of corruption and the likelihood of younger population engaging in corruption. This primarily arises as corruption gets internalized like other social norms and preferences by the inhabitants. This finding broadly reaffirms common sense thinking - if you are surrounded by a bunch of crooks all the time, chances are much higher you would end up crooked as well.

Since 1995 when Transparency International started publishing a 'Corruption Perception Index', India's score has improved from 2.78 in 1995 to 3.1 in 2011. However, most recent trend on the index has been disappointing.

India's score reached a high of 3.5 in 2007 and has since then rapidly declined to 3.1 in 2011. We stand 95th among 183 countries. Some of the other emerging countries like China (3.6), Ghana (3.9), South Africa (4.1), Cuba (4.2) and Costa Rica (4.8) fare much better than us in combating corruption. In the last 8 years of current Government, we have seen scams after scams unfolding on a regular basis, only difference being the magnitude. Widespread failure of the investigative agencies, often controlled by the same corrupt politicians leaves the Judiciary helpless in enforcing the rule of law due to lack of evidence. Getting caught and then let off on bail while the legal process drags on for years allows the corrupt to enjoy their ill-earned bounty while the common man keeps toiling for basic necessities of life.

This has created an air of immunity around corrupt behavior leading to India caught in a vicious circle. Because there is a large amount of corruption, the younger population internalizes and accepts corruption as a social norm and this perpetuates the benefit of corruption to the public servants. Waning public interest in Anna Hazare's campaign against corruption is a good example of how people seem to have accepted corruption as a part of life.

Given that more than 50% of the population is under the age of 25, this vicious circle must be broken with an iron fist, else we risk loosing everything we have achieved in the last 64 years as a young democracy. It is going to be a long fight but we need not loose heart. We need to look at emerging nations like Chile and Botswana that at present have bribery levels of even lower than some of industrialized nations. Many other developing economies like Hong Kong, China and Singapore have been able to transform themselves from being very corrupt to relatively clean within a reasonably short period of time.

For the same to happen in India, we need a grass roots movement like the ones launched by Ram Mohan Roy and Veer Savarkar to rid India of prevalent social ills. In addition to demand for stronger and independent oversight bodies, strong police force and efficient judiciary, we would need to get rid of government in many aspects of our life and take away their discretionary powers. Price controls, complex and opaque regulations and layers upon layers of bureaucracies has created a huge black market and an unorganized economy where only the privileged few win. Gross root movement against corruption must focus on revolt against government's control of our lives. This fight can start today with each and every one of us pledge not to pay any bribe and battle the system for our rights and at the same time fulfill our responsibilities as civilized citizens.

Sahara and BCCI - 'Corrupt begets Corrupt'

It is fascinating that a group as tainted and corrupt as Sahara continues to not only remain a sponsor of the Indian Cricket Team but also has the audacity to play hardball with the BCCI. In a country of over a billion people who follow cricket as a religion, Sahara threatened to pull sponsorship and got BCCI, world's most powerful cricket board, to cow down.

One would believe there is no dearth of sponsors willing to pay top dollars to win sponsorship of the Indian Cricket team but that does not seem to be the case. BCCI did not get a single bid for sponsorship when Sahara's previous sponsorship contract expired in Dec 2009. After BCCI dropped the floor from 3 crore to 2.5 crore per match, Sahara outbid Bharti in a two way contest. Despite the emerging middle class that is quality and brand conscious, corporate sector's focus on building brands and go international and international companies competing to build a presence, BCCI could not get anyone except the incumbent and Bharti to bid in 2010.

I think the reason for this is fairly simple - 'Corrupt begets Corrupt'. Just like Sahara is probably one of the most corrupt and least transparent corporate groups in India, BCCI is one of the most corrupt and opaque sports authorities in the world. Why would any sane corporate want to get involve with a messy bunch of corrupt politicians who run the cricket board. I am actually surprised Bharti did bid for the sponsorship.

Read on for the credentials of the Sahara Group:

Sahara rose to prominence on the strength of its retail savings collection business - a network of agents going door to door to collect as little as 10 bucks a day in recurring deposit schemes. The business was a roaring success, having a depositor base of more than 6 million mostly poor people and reaching a corpus of 150 billion Indian rupees (USD 3 Bn). This business was extremely profitable until the Central Bank cited a number of irregularities and violations. Central Bank cancelled its certificate of one of the entities and barred the other one from accepting any fresh deposits and pay off all existing deposits by June 2015. This matter is now sub-judice in the Supreme Court.

Funny part is Sahara has not given its accounts to the Court despite repeated requests saying the matter can only be investigated by the Corporate Affairs Ministry where they used to have a friend in Salman Khurshid, a fellow U.P. politician. Not to digress but Khurshid also happened to be the defense lawyer for SIMI, the Islamic militant organization in India alleged to be responsible for many bomb blasts. It is widely believed by RBI and SEBI that there are no assets matching these customer deposits and money may well have been siphoned off.

Sahara's housing projects launched with much fanfare and national advertising campaigns in 2003-04 collected hundreds of millions in advance money from innocent customer. Outlook ran a fantastic story (http://business.outlookindia.com/article.aspx?266568) on the light of these customers who have been waiting for more than 7 years now for their apartments but none has been delivered as yet. To run salt on the wounds, Sahara filed a prospectus to list the real estate arm with SEBI and at least SEBI is doing it job of doing due diligence and has held approvals for the IPO due to concerns on disclosure.

Sahara Group is also alleged to be involved in the 2G scam. Sahara is supposed to have acted as a money laundering agent for movement of illicit money. The Group is also alleged to have threatened the investigative officers with running stories on them in their newspapers and news channels. Objective was clearly to stop them from investigating the Sahara links.

Sahara's political connections with Amar Singh, probably the most slimy, gross and corrupt political middlemen India has ever seen and with the Samajwadi Party.

BCCI is not far behind:

BCCI is the cozy club for politicians and all parties have made BCCI as the place where they not only get publicity and red carpet treatment but also big bucks. Sharad Pawar leading a sports body - need I say more? We all remember Shashi Tharoor resigning from Union Ministry for his role in influencing auctions and personally benefiting later.

BCCI rejected Government's proposal to come under the purview of the 'Right to Information' Act and also rejected the Sports Bill because they want to stay free from public scrutiny and accountability.

BCCI publishes no audited accounts despite being extremely cash rich and profitable. England and Wales Cricket board published an annual report with audited accounts. Why is the BCCI special? Why should they not be audited by CAG or at least an audited firm? Shouldn't we get to know the complex web of related party transactions that go on inside BCCI?

IPL auctions, TV and sponsorship rights, ticket sales and other contracts are worth billions of dollars every year and opaque contracts, siphoning of money continues to rule. Conflict of interest is a vaguely understood term as a critical Board member himself own stakes in an IPL team.

BCCI's elections are dramatic, dirty and hostage to political affiliations. Courts have had to step in to stop the backdoor lobbying and financial muscle power of the politicians but to no avail.

This relationship is disgusting at so many levels but the most disgusting of all is that thousands of innocents have been fooled and would continue to be fooled into believing Sahara is a reputable group solely due to its sponsorship of Indian Cricket team. A street hawker or migrant construction worker or for that matter a lower middle class housewife does not know of the RBI or SEBI ban on Sahara; all they know is that if Sachin and Dhoni play for India with shirts printed with bold letter Sahara and its embroidered logos, it must be a big and good firm. Sahara's logo on the Indian Cricket team's shirts and its newspapers and news channels (often used as a mouthpiece for group businesses and political friends) create enough pull for these people to part their hard earned money to those commission agents employed by Sahara with the hopes of getting small daily deposits back in one large amount. They probably need not worry as Sahara has enough political clout to negotiate a bailout.

Does an Intolerant Society Deserve Free Speech?

Recent events relating to the cancellation of Salman Rushdie's visit to participate in a literary festival in Jaipur and Government's summoning of the Social Media Chiefs asking them to censor content highlights the restrictive free speech situation in our country. We have been subject to these experiences time and again - M.F. Hussein's paintings and the court cases which made him leave the country for the fear of his life, ban on release of 'Great Soul: Mahatma Gandhi and His Struggle With India' and many other books and movies that seemingly can harm social harmony or defames a popular figure.

On the other wise, Indian Government formally objecting to BBC on Top Gear's India special show and on Jay Leno's joke about Golden Temple highlight the intolerant nature of our society. What is unfortunate is that even our Judiciary seems to have jumped into this debate and has started giving in to their individual interpretations of morality in legal matters. Just the last month, one of the justices described a live-in relationship as immoral and a western fad while upholding the legality of it. This is a disgrace.

I have been asking myself, whether an intolerant society deserve free speech in the context of restrictive free speech in our country and intolerant nature of our society? I believe the answer is affirmative - we need free speech first as a matter of principle being a liberal and secular democracy and second to get rid of this very intolerance.

The value and relevance of free speech in a democratic society cannot be underestimated. John Stuart Mill in his essay on 'Liberty in Utilitarianism' said "there ought to exist the fullest liberty of professing and discussing, as a matter of ethical conviction, any doctrine, however immoral it might be considered." Denial of free speech essentially denies the freedom to stand for what we are and therefore must be protected. Voltaire famously said "I disapprove of what you say, but I will defend to the death your right to say it."

Restrictions on free speech due to obscenity, immorality or social in-harmony has been a subject of debate not just in a young democracy and diverse society like India but also in mature and largely homogeneous societies in the West. Right to free speech always invariably involves tolerance for a great deal of non sense and matters which are in bad taste.

However, due to a diverse, overly religious and significant illiterate population in India, an act of non sense takes the form of discrimination, defamation or offensive. The 24X7 sensation hungry media plays along by portraying and magnifying non sensical acts as crafted acts of vengeance or offense against one by the other. Politicians find an easy and beneficial solution by applying censorship laws in the name of public benefit. Our large and charged illiterate population often fails to understand that these censorship and defamation laws help the government avoid criticism and escape accountability while our educated middle class is too indifferent and stretched to make ends meet in an increasingly consumerist society to really bother about these trivial issues. So what we get is cancellation of Rushdie's visit, ban on sale of books or release of movies that have anything controversial and politicians playing to the gallery by protesting Jay Leno's jokes and BBC's programming.

I believe if we are to survive and flourish as a true democracy, any test for allowing further restrictions upon free speech must strive to be more stringent. Legal restraints upon individual freedom of speech should only be tolerated where they are absolutely necessary to prevent infliction of actual harm or to secure the liberties of others. A remote possibility that someone will be harmed or unsubstantiated claims that the stability of society will be undermined is not sufficient justification for legal prohibition. People always find it easy to adopt double standards and find some persuasive reason to not tolerate other's right to free speech but as a society we must strive to create capacity to tolerate views of others. We must be taught right from the beginning that an open and free exchange of
ideas, confronting old ways of doing things and debating the relevance of established ideas on morality and societal norms in the present context is the best way to create a dynamic and intellectually vibrant society. Else, we would continue to be a developing country, not just economically but socially as well, that is striving to become a developed society.