A delhi boy whines and opines. Mainly about science, economics and politics. And the quirky things in life.
This one was a surprise. I had written a letter to the author of a popular column in DNA India appreciating his writing. Excerpts of the letter appeared in DNA yesterday.
I had no clue. A Prof. just told me he saw my letter. Here it is:
Link to Rajiv Desai’s amazing article that I had responded to.
[Click on image for a larger version]
The “Reform and End the Forms” images made by me are licensed under a
Creative Commons Attribution-Share Alike 3.0 United States License.
Today, Maharastra (India’s richest state) repealed an archaic land law, the Urban Land Ceiling Act (ULCRA), 1976. ULCRA was enacted to decrease the concentration of land holdings in cities. If you owned more than the “permissible” amount of urban land in Maharastra, it could be forcibly taken away from you and redistributed to the “needy.” Compensation for your land was a pittance.
The ostensible purpose of ULCRA was to provide low cost housing in cities. But as we all know, these socialist legislations can have very perverse effects. Instead of an urban socialist utopia where the government was going to build low cost housing with hospitals, roads and other urban amenities we have slums and virtual garbage dumps around our cities. Instead of decreasing land prices we have the third highest land prices in the world in Mumbai. The reasons are simple:
(1) As the government tried to forcibly overtake land in the city, thousands of landlords filed cases in the courts. We all know the speed of the Indian Judicial system. Land that could have been privately developed got locked up in court battles. One could argue that that the fault lies in the Indian Judicial system and if the cases were resolved faster this would not have happened. I have two counterpoints to that:
(2) A whole new bureaucracy sprang up that put its dirty hands in every land deal. Clearances of all kinds were required and “exemptions” an “No objection certificates” (NOC) needed. These bureaucrats essentially became, in the language of economics, rent-seekers.
(3) Land that was successfully acquired under the act was hardly developed because of the general lethargy of government departments. The quality of urban governance is so abysmal in India that one can not even be sure that deserving recipients would get housing in these acquired lands. Many of these lands fell in a legal limbo or were encroached upon by squatters or politicians.
Until a few years ago, almost all Indian states had UCLRA in place. One by one they have repealed it. Today Maharashtra, AP and West Bengal are the three major states where UCLRA is still operative. Andhra Pradesh is a very progressive state and I believe it will be ultimately repealed there too.
Bengal is the only major state where the politicians are ideologically committed to the objectives of the law. And its no surprise because these rent control and land ceiling laws are showcase legislations for the left parties in India. I hope West Bengal climbs down from its fundamentalist viewpoint and repeals these anti-development and corruption inducing legislations. Calcutta and Mumbai, our most majestic cities have become shantytowns partly because of these cancerous laws.
To the left parties who support these laws I would request them to see the real ground level effects of these laws. Lets recognize human nature and motivation and then frame laws. Communism failed because it was a fundamentally flawed ideology. Many people say that communism failed because it was not “implemented properly” or failed due to a western conspiracy. My view is that it failed because it could not be implemented properly. Any system that denied humans fundamental freedoms like the freedom to trade, to choose a profession, to choose how to live, to choose beliefs and concentrated control in an unelected, all powerful bureaucracy was doomed to failure.
“What does it matter if the cat is black or white as long as it kills rats?” is a very famous quote by Chinese leader Deng Xiaoping. Our leftist leaders must realize this and repeal all legislations that have failed in the past decades. Most often these leftist “leaders” have some vested interests (a union to run, a government department to lord over, bribes to collect) so they hold back these reform moves. Whatever the reasons for holding back reform, whether ideology or vested interest, Indian citizens should put pressure on our elected representatives to overturn these archaic legislations that are holding our country back.
The delay in implementation of the Delimitation Commission’s report is threatening to affect India’s democracy. Delimitation or redistricting (as it is called in the US) is a highly technical exercise that democracies carry out every few years. It has a very deep impact on the dynamics of electoral politics. Because of its highly technical nature it is subject to abuse and misuse (there can’t be much hue and cry about an issue that not many people understand!) In this article I give a background on the ongoing delimitation exercise in India and explain how a delay in this process could make the Indian democracy unfair.
Every electoral democracy divides its geographic area into different constituencies. In countries like US, UK, India each constituency sends one member to the parliament. Since people are constantly moving around in a country, with the passage of time, some constituencies gain voters while others loose them. It makes sense for the boundaries of all constituencies to be periodically revised so that each parliamentary constituency contains almost the same number of voters. This is to ensure that each citizen’s vote is of the same value. As a practical example, if there are two constituencies that send 1 MP each to the parliament and one has 400,000 voters and the other 1,400,000 voters you might justly accuse the country for treating the citizens of the second constituency unfairly. Sadly, there are many such examples in India today and that is why a fresh apportionment or delimitation is required.
Our constitution provides for a “Delimitation Commission” that is supposed to redraw geographical boundaries of electoral constituencies every census (ten years). But the last delimitation happened on the basis of the 1971 census! This was because Indira Gandhi amended the constitution (42nd amendment) so that delimitation would be frozen on the basis of the 1971 census. The reasoning was quite logical for that time but some distortions have crept in since then. The reasoning was as follows: India has a rapidly growing population. Some areas of India are growing faster in population than others. Relatively richer and educated states like Maharashtra, Tamil Nadu, Gujarat have much lower birth rates than the poor UP, Bihar and Orissa (the better off you are, the less children you will have. This is a worldwide phenomenon). So if delimitation continues to happen in the manner envisioned by the Indian constitution, the states that make maximum progress towards development and reduction of population growth rate will send fewer and few MPs to parliament every decade! So it was decided that the number of MPs each state sent to parliament would be frozen. This removed the disincentives to population control the states faced. One can see how this also added some stability to India’s federal structure for no state would tolerate reducing its voting power in parliament!
It was a positive reform and Indira Gandhi was proved right. Lets see some examples. Out of the 543 seats in the Indian parliament, Tamil Nadu, one of the rich (low population grow rate) states, sends 39 MPs to parliament presently. This number of 39 was decided on the basis of Tamil Nadu population in the 1971 census. If India was divided again into 543 parliamentary constituencies on the basis of the 2001 census, Tamil Nadu would only get 32 seats! UP, a poor state (with high population growth rate) has 80 seats today in parliament. On the basis of the 2001 census, it would get 88! (See here for this calculation).
Unfortunately, this well intentioned constitutional amendment introduced some problems of its own. We know that Tamil Nadu has 39 MPs in parliament. Lets say 30 seats came from rural areas and 9 seats from urban areas when the delimitation was originally done on the basis of 1971 census. This means that the rural citizens got 30/39 = ~75% of their states’ representation and urban 25%. Its now 2007. Rapid urbanization has taken place in the 36 years since 1971. Lets say 40% of Tamilians now reside in cities. Sadly, because of the freeze in delimitation they will still enjoy only 25% of the vote! One can understand the distortions this will have in the allocation of resources and the socio-economic priorities of the state. Tamil Nadu is merely an example; each state in the whole country faces the same problem! (Note that this example is numerically hypothetical because I don’t know the exact urban/rural parliamentarian numbers for Tamil Nadu in 1971 or 2001. But the example is very real)
This brings us to the critical point: Urban populations have been exploding but the cities continue to send the same number of MPs since 1970s. When you wonder why politicians continue to talk about farmers day and night and not talk about the city folk, the answer is simple: politicians represent their constituents and urban India is not represented adequately!
The situation is unsustainable and we cannot fight another election on the basis of 1971 boundaries. India’s parliament realizes this and has decided to do a lovely fudge. Each state as a whole will continue to send the same number of MPs as it did since the 1971 census delimitation, but the constituencies within each state will be redrawn so that each has nearly same number of voters. A Delimitation Commission is presently engaged in this task. Sticking to the Tamil Nadu example: If people migrated from villages to cities within Tamil Nadu since 1971, the cities will get more parliamentarians within the quota alloted to Tamil Nadu. While each citizen’s vote across the country will still not be equal, their vote should be of equal value within the state after the fresh delimitation exercise is completed. I believe this is a fair compromise for the long term.
The current Delimitation Commission has completed its work for 25 states across the country. Its baseline data was the 2001 census. Predictably, rural areas within states have lost seats to the cities. There are other side effects: politicians who have won and fought elections in a particular constituency for years are now worrying about changes in the social composition of their (modified) constituencies. Some politicians have lost their constituency all together because it does not exist anymore! With the 2009 elections looming near, there is a real fear that this massive reform in our democratic system might not go through. My fear was confirmed when the Times of India carried an article on September 15 that the delimitation exercise might be scuttled. This will be a extremely negative outcome. If our electoral districts are tied to the past our issues and politics will be tied to the past too.
This is an important issue. We should all learn and talk about it. Lets spread the news. Its vital that delimitation on the basis of 2001 census is implemented in the next election. The report is ready for 25 states. Now we should just have the will to implement it. The fairness of our democracy is at stake.
When anybody tries to apply a foot on the accelerator in this country there are 10 that try to apply the brakes
Read this quote (or an approximately similar) version of it somewhere. It summarizes my sense of disappointment when economic reform is blocked. The reforms are stifled in the name of protecting the weak and poor but in reality are stopped only to protect some special interest group that has gotten fat by exploiting the current system.
A prime example is Karnataka’s APMC (Agricultural Produce and Marketing Committe) Act. Every state has its own APMC Act but they are all broadly similar: The APMC Act sets up a committee for each market area and forces farmers to sell all their produce to it (see footnote [1] below). Predictably, this monopoly is recipe for disaster and tales of exploitation abound. Farmers don’t have a choice to sell their produce in alternate (private) markets or directly to companies (who might be willing to give them a better price). While this monopoly is harmful to farmers it is highly advantageous to traders who have been given this monopoly. So when Karnataka decided to amend this Act, all hell broke loose. APMC members went on strike. The supply of vegetables to Bangalore was affected. The committee members charged that the legislation was “anti farmer,” was designed to give MNCs “backdoor entry” and so on.
Miracles happen in India too and thankfully this reform move has had a happy ending. The Karnataka assembly has passed the law. The Act now has to go to the governor for signing. But lets hope this amendment really translates to ground level changes. Will farmers have more choices? Lets hope so. We can be sure of one thing though: the APMC members will try to sabotage the implementation of this law.
There are many milestones to be crossed before farmers have the freedom to sell their produce in Karnataka. Best of Luck.
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1 Agricultural Markets in most parts of the Country are established and regulated under the State APMC Acts. The whole geographical area in the State is divided and declared as a market area wherein the markets are managed by the Market Committees constituted by the State Governments. Once a particular area is declared a market area and falls under the jurisdiction of a Market Committee, no person or agency is allowed freely to carry on wholesale marketing activities. The monopoly of Government regulated wholesale markets has prevented development of a competitive marketing system in the country, providing no help to farmers in direct marketing, organizing retailing, a smooth raw material supply to agro-processing industries and adoption of innovative marketing system and technologies. (excerpts from the authoritative source)
Indian politics is brilliant because all parties have agreed not to do anything substantial. That would be too tough. Parties use emotional issues like caste, religion, “socialism” and reservations to create voter bases. Running a campaign on emotional appeal and the injustices of “history” is easier (and cheaper) than showing actual movement on the ground like power plants, roads, schools and hospitals.
Each party seems to have its own brand of fear mongering. Parties on the right use culture, religion and rabid nationalism (”Hinduism is in danger”, “We are appeasing minorities”, “Hinduism is the only answer”, “Pakistan is the enemy” etc.). Parties on the left use economic fear mongering (”Liberalization will lead to take over by MNCs”, “The government is pro-poor” “All landlords and industrialists are evil” etc.)
When will we transition into “development” centered politics? Whenever that happens, one thing is clear: Education will play an important role. Education allows you to look beyond all these distractions of caste, religion or imaginary fears created by political parties. I am optimistic. In the richer and better educated southern states, political parties have started changing their ways. There is less talk on emotive issues and more talk on giving citizens “roti, kapda, sadak, pani, makan, bijli and phone” (food, clothing, roads, water, housing and electricity and telephones).
We continue wait for India to enter an era where political battles are fought more on real, rational issues rather than emotive, chauvinistic and primitive ones. With an annual GDP growth rate of 9% (like it is right now) and rapidly rising education levels, that day may not be so far away.
Reliance Fresh is a vegetable chain owned by Mukesh Ambani’s Reliance Industries. Its a modern food chain that offers low prices, fresh vegetables and a superior shopping experience. Its a breath of fresh air in India’s highly fragmented and obsolete retail industry. It was attacked by a Member of Parliament. Now its been asked to close in UP.
Well, first some background. The government is UP is new. The Samajwadi Party (SP) recently lost to the Bahujan Samaj Party (BSP) in a landslide. The BJP has been demolished too. So we can understand the frustration of the opposition parties. They would like to create a controversy and destabilize Mayawati’s government.
Its easy to whip up fear among the millions of poor in UP. A big corporate giant is out to exploit farmers and kill small traders. They will send all the small traders out of business with their low prices. After they have done that they will raise prices for the consumer and drop procurement prices for the farmer. All very predictable. But the sad part is the its all very untrue.
As of 2007 retail and food chains account for a vanishing fraction of total sales in India (unlike advanced economies). They do not represent a threat to the millions of small traders as a whole now and for the forseeable future. In the localities they are present, they can negatively affect the small traders. But they provide so many benefits as a whole to the economy that its certainly worth it in the long run.
Interested in Science & Mathematics. Open Source Software. The Internet. Economics. Politics. ++ Fun Stuff ++
Dog Owner Takes On China’s Web Censors / India vs China
This bizarre but telling article indicates the level of terror the bureaucrat wields on an ordinary Chinese. Read the article to get a sense of the inability of the average Chinese citizen to criticize the government.
For those people who are jealous of China’s success I tell them: Yes, there is much to be jealous of in China. But here in India we have much to be proud about too. Our economy is much smaller than China’s but we are now growing at 9% + every year. Not bad for a democracy where people are free to have as many children as they want; as many dogs as they want; criticize, vote out and participate in government. They say India is where China was 10-15 years back economically. Well, fine! I’d take a slightly backward but democratic India over a totalitarian but rich China any day*! Secondly, China is probably 20-30-who knows how many years behind India politically. When China will transition to a democracy is anybody’s guess! I believe Chinese citizens will not be sophisticated enough compared to Americans, Europeans or Indians to be able to understand and react to changes in tomorrows world. They will be susceptible to rabble rousing and extreme nationalism (citizens of democracies understand issues far better because they is much more transparency and debate on all aspects of an issue). The Chinese state is likely to make grave errors in the future because citizens will not able to guide it on the correct path.
Underpinning all this is my sincere belief that you need a free mind to understand what is happening in the world in every sphere: social, political, economic and scientific. You also need a free mind to innovate and create. India is freeing its citizens economically and socially and that is something amazing too.
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*I’m not implying that democratic freedoms cause a reduction in economic growth rate. India is behind China economically not because it was a democracy but because it made some poor decisions like adopting a dirigiste model of development. We all know what the License-quota- permit-notification-exemption-circular-raid Raj did to India.