Indian Railways: The "Tejas" Way

Indian Railways holds a place of pride not just for India but at the global level too as it ferries lacs of customers every day from far lung areas and is one of the cheapest source of transportation. 8116 million travel by trains generating revenue worth INR 462.801 billion every year and from freight the earnings are INR 1020.28 billion annually. Even today rail connectivity means that the place can be easily identified on the national map. There are still small towns and villages which do not have proper connectivity in terms of railway lines which is a matter of concern for the government and every year the Railway Minister promises centum connectivity. Currently, the privatisation of Railways has raised many questions that should become part of public discourse.

            The liberalisation of the economy in 1991 had set the stage for what was coming for the economy in terms of state intervention and the role of the market in it. Since the late nineties, there have been constant whispers about the privatisation of Konkan railways but so far it has not materialized. When Lalu Prasad Yadav became the Railway Minister, part-privatisation started with a lot of services being outsourced to public vendors making the department profitable for the first time. After him, the precedent was set for slowly privatizing bits and pieces of the services provided by the organisation without inviting the ire of the common man or the intelligentsia, all in the name of better services and general good. However, over the years there have been cases of theft, loot and arson which have revealed the confluence between the perpetrators of these acts and the private vendors.

            Coming back to the privatisation of railways or the first private train Tejas which made its maiden run on 4^th October 2019, the basic question is that are we ready for such an experiment and secondly is the timing good. The new Managing Director of International Monetary Fund, Ms Kristalina Georgieva said that India is the most affected country by the current bout of recession and as the incumbent government has often quoted the predictions of World Bank and International Monetary Fund, this statement needs to be taken seriously. In this time of recession and disparities becoming wider and more visible, thinking of a product only for the corporates and the rich shows poorly on the government. Secondly, though this train is being run by the subsidiary of IRCTC, they are not paying for the infrastructure that has been built by the state. Here, we come back to the old age question of why state-run businesses cannot be run as efficiently as private companies even with the welfare dimensions in place. I am remembered of a similar thing happening in my home state of Madhya Pradesh when Department of Roadways was closed down citing losses and lack of passengers. Now the same routes and roads made by the government are helping the private players to ply their buses on them and making sizable profits. The case of Railways too, is the same as the same track from Lucknow to Delhi will help Tejas to cut down on time and be “efficient”.

            I am not against privatisation per se but I firmly believe that the infrastructure that has been built by the state should not be handed over to the private players overlooking the interest of the common man. The employees have to be taken into confidence so that they too become stakeholders in the upliftment of the organisation. The business model needs to be changed so as to accommodate the aspirations and requirements of the common man without giving way to crony capitalism and corruption. The sense of belongingness to such a huge organisation is very necessary to make it a corporate.

            Another area which needs to be very seriously taken is the security and safety of railway tracks and trains. The government has sanctioned INR 114.18 crores for the safety and security of railways which needs to be increased and provisions have to be made to technological uplift the railways keeping in mind the weather conditions of the country so as to avoid mishaps. Every year there are many reported and non-reported accidents mainly because of human negligence and technologically also we fail to use the means at our disposal raising questions on the credibility of the organisation, though, in 2018-19, the railway's department has overhauled its tracks, the largest in the past fifty-five years. The separate Railway Budget needs to be restarted as this gave a clear picture of the finances and the vision of the government. There have also been constant voices stating that instead of starting new trains, the present trains need to be run on time with mechanization. The services that have been leased out to the private players have to be made more accountable, both in terms of quality and delivery.

            On 7^th October 2019, Amitabh Kant, the CEO of NITI Aayog wrote a letter to the Chairman of the Railway Board talking about the privatisation of 50 stations and 150 trains in the first phase. This is in relation to making the services world-class forgetting that these services will come at a cost which a large majority of people using this service are unable to bear. If the sole motive is to pull customers from airlines to railways, especially the fringe buyers, then too, this strategy reeks of high handedness of the government and is almost like a slap on the face of the commoners. This systematic withdrawal of the state from the basic services is a matter of concern. The society has to be equitable for the state to be just administrator.  

           

Indian Polity, Democracy and its Current Status Continued

           This is an extension to an earlier blog by the same name where I had discussed the present day polity and the interpretation of democracy. However, there have been friends who have raised a valid question that I have not offered any solutions to the problem but have just deliberated on the present status. This blog is dedicated to solutions which according to me are valid and implementable (therefore the length). But before I come to the solutions it is necessary to discuss the term Democracy because many readers are confused about the very meaning of this word. As per the Webster dictionary, it is "government by the people" or as Abraham Lincon said, "by the people, for the people, of the people". The Greek origin of this word also defines it as "people's rule". In today's parlance, it means a popular government or a government which has won maximum seats but not necessarily the votes of the majority, for example, the incumbent government got 31.3 percent votes in 2014 and this time it got 37.4 percent votes, which translates into 282 and 303 seats respectively. Very interesting to note that 62 percent of the population have not voted for this government, but democracy says that once the government has been chosen it governs all, however, today there is a different take to it. It is believed and propagated that if you have not voted for the present government then there is an element of anti-nationalism and therefore the government is free to treat you differently or turn a blind eye towards the atrocities meted out to them.

        Democracy under the pure form of capitalism and socialism cannot be termed as proper democracy because both are at the end of the spectrums and therefore as Gandhi ji had suggested a middle path needs to be taken. The common man needs to be empowered to understand and utilize the rights that they have constitutionally received.
         The problem that people like me have with the present version of democracy is that in the name of "people's rule", illogical things are thrust down our throat. We need that the incumbent government in its present term talk of the "people" that it represents. The state has a certain responsibility towards the masses which it cannot overlook the benefits of the bourgeois. I feel that the most important thing or sector that needs to be worked upon is education because empowerment will come from education and awareness. Right now entitlement has been given but the real power will come only when people are conscious about their rights and duties. The dichotomy of the society can be understood from the fact that though literacy rates have gone up, the percentage of people exercising their franchise has come down. The part of the cities where the elites inhabit are the ones which have the least voting percentage because they are sure that in the name of "democracy", it is feudal who will rule whether they vote or not. Parties have become more important than issues, certain people have been given cult status which is very much against the very grain of democracy which says that everybody is equal and there has to be a collective leadership. The Election Commission has to be realistic when it comes out with figures of what a candidate can spend because we all know what mockery it is. People too, have to be proactive when they elect their representatives because they are the ones who will get funds for the constituency and take decisions on behalf of the masses which according to them are "best" for the people.
            A very important part of democracy is that state does not have a religion (in case of India, this has been mentioned in Indian constitution) but this is not visible in today's time. In India, the word "secularism" is the most abused. It surely does not mean minority appeasement (read Muslims) but it also does not mean that the majority would incite religion in the name of nationalism and worst the state stands as a mute spectator. This is facism and it is better to stick your neck out and call it so. The legislative has to be very strong and firm in its decision making if we do not want to become a fascist state. People too should not include politicians and parties in religious affairs for their petty benefits.
        The opposition has to play a very active role if the democracy is to be conserved because they represent 62 percent of the voters who have not voted for the present government.  Currently the opposition is in a mess as they are playing opportunistic politics and are being run as fiefdoms. The Left needs to reinvent itself in the present age when regional parties have become a reality and there hardcore voters are shifting not to the like minded parties but to the right. The intellectual arrogance has to make way for pragmatism and plurallity. The law needs to play its role because as I write this blog, the legit government of Karnataka is being destabalised through horse trading. Goa and Tripura are the wrong precedents which have been set by the ruling party.
    Freedom of speech is the fourth pillar of democracy and now with a few media houses ruling the roost, the alternate media needs to be exploited to the fullest. And this is where the "libtards" or the intellegentsia have to let go their egos and instead of humiliating the representatives have to raise valid questions and talk in a language that is understood by all. Most importantly people have to be critical and the state has to take in the views of the critics too because otherwise there will just be an echo chamber.
      Democracy is just not about fighting and winning elections, it is also about serving people whom you represent. The political class has forgotten this and therefore civil society has to now enter into this realm, call the representatives amidst themselves to involve these representatives in their day to day issues. The plans need to be localised and questions raised in the parliament.
     As this is the budget season, it is imperative that shayari be interwoven in the narrative. I end with the famous lines of Shailendra

Humare Karwan ka Manzilon ko Intezaar Hain

Ye Andhiyon, Ye Bijlion ki Peeth par Sawar Hain

Jidhar Padenge ye Kadam Banegi ek Nayi Dagar

Agar Kahin hain Swarg to Utar la Zameen Par

Fifty Years of Bank Nationalisation

      

This year we are celebrating the fifty years of bank nationalisation decision taken by the then Prime Minister of India, Mrs Indira Gandhi which then and now creates a lot of debate amongst economists, bankers and policymakers. Lord Meghnad Desai while opinionating on this in the month of January commented that it was one of the worst steps taken by the government and the state should rid itself of this white elephant as soon as possible as it is bleeding the taxpayers' money. He is not alone to raise this point as the pro-capitalist section have always been baying for their blood and the policy measures that were introduced as a part of it.  They have argued that it created a very inefficient system which was used for welfare when a bank needs to be a purely commercial entity with profit making as the main goal. The priority sector lending has created a stress on the balance sheet of these banks without creating proper accountability, also not helping the cause for which it was introduced. In recent years, Non-Performing Assets (NPAs) have become the bone of contention as BASEL norms have tightened their noose on the Central Banks of the countries and RBI following the lead has asked all the banks to reduce their NPAs to manageable limits. Bank mergers are also a part of "commercialising" the nationalised banks as Raghuram Rajan have often reflected on the size of Indian banks, wanting a tier system with few very big banks at the top, followed by some medium-sized banks and then a large number of small/payment banks. Reserve Bank of India has been working on these lines and the analysis of the recent licences given to new banks shows the intentions of the Central Bank very clearly.

The present government is perceived to be led by a party which has "rightist" economic orientation or in other words, favours the laissez-faire system. However, in 2014 when it first came to power the Prime Minister in his first Independence Day speech declared the ambitious Jan Dhan Yojna promising that the entire country or every family will have a bank account by 2018 would have a bank account. Analysis of data shows that these accounts were opened by Public Sector Banks (the bête noir of capitalists) and were used by the "capitalist opposers" during Demonetisation to park their "clean money" meant for development. The state wants these banks to continue their aggressive drive to counter NPAs by not giving loans to the new entrepreneurs, students, women with low income or anybody who is not complying with the image of "developed" Bharat. It asked the SBI to give a loan of up to $1 billion for an Australian Coal mine project which was 0.9 per cent exposure of the total 5 per cent exposure of SBI for the coal industry. It is a different matter that the deal had to be called off because of pressure from the Australian environmentalists and widespread criticism of SBI's deal within the country. These two decisions highlight the dichotomy that is there in the economy with the state using these instruments for their political benefit, on one hand, encouraging crony capitalism and on the other hand encouraging privatisation of the Public Sector Banks.

My take is that in a country like India where 62 per cent of the population is living below the poverty line, where about 89 per cent of the industries are in the informal sector, where agriculture is still the main occupation, we cannot expect banks to be purely commercial entities. They have to play a bigger role and my personal study shows that Public Sector Banks have done much better than the Private Sector Banks, both at the national and international level. Employment provided by the nationalised banks cannot be overlooked or ignored, nor can be the credit facility provided to the priority sector. Prior to 1969, India had the private sector looking after the banks and historical data shows that between 1947 and 1955, about forty banks collapsed each year. Credit was monopolised by industries, agriculture was left to fetch for itself which was corrected after nationalisation. The RBI policy to allow one urban branch only when four rural branches would be open was the initiation of financial inclusion. As far as NPAs are concerned, it is true that Public Sector Banks have a higher percentage of them, to be precise 90 per cent of INR 8.41 crores is with them, but the origin of these NPAs have to be evaluated. Most of them have been due to the bank's exposure to huge industries who because of their capitalisation and goodwill have taken advantage of these banks. The recent case of Yasvardhan Birla is a point of proof. We as a nation require the banks to remain strong pillars to support the superstructure as the non-state actors cannot be allowed to take decisions of "rashtr hit"

Indian Polity, Democracy and its Current Status

First things first, let me put out a disclaimer that I am not an authority on Gandhi's writings so my views may be of someone who has read very little on him, but still whatever I have read, I wanted to share because today the form of democracy that we are seeing in the country is not your regular textbook democracy or for that matter polity. Last week I read two writings which have had a prolific impact on me and made me thinking on the issue of democracy in particular and Indian politics in general.  One is S N Agarwal's "Gandhian Constitution for Free India" and the other was an article by popular psephologist Yogendra Yadav. In Agarwal's writing, one can easily decipher the turmoil between a capitalist structure and the socialist structure with Gandhi coming up with a middle path. His idea of democracy was based on non-violence as he said that any democracy that is established via violence cannnot be a true representative of the people. His views on decentralisation are well known and documented, have been implemented in the name of Panchayati Raj but the reality of it is not hidden from any of us. Yogendra Yadav did not write directly on democracy but he writes about how "nationalism" which according to him has been abandoned which Gandhi too often mentioned in his writings and public speeches and opined that Indian Democracy has to be based on "nationalism".

Now the question that arises is whether the dirigiste regime that we have today or even earlier really understands the meaning of democracy. It is just not the advocacy of adult franchise, nor the way of conducting elections or haveing numerous political parties, but actually giving voice to the masses. Unfortunately today in the name of politics and democracy, there is constant demeaning of the masses, to create a "bigger picture" the innumerable smaller pictures are overshadowed and most importantly "nationalism" has become jingoism whereby questioning the government/governance is translated into being unpatriotic or downright anti-national with the "nationalists" distributing free visas for the neighbouring state of Pakistan.  Its time that Democracy is not just centred around vote bank politics or winning elections but rather creating an environment for the conducive living of all brethren and sisters because as will be the polity of the state, so will be the socio-economic policies. Gandhi said that when direct elections will take place at the village level, communalism and violence will decrease but today, just the opposite is happening as elections are being fought in the name of religion, caste and creed. Time has come to ponder on the thoughts of Gandhi even by them who abhor his views because this "fakir" has answers to many of our present woes.

Elections 2019 and Economy: Match or Mismatch?

Elections 2019 have been a mega election in terms of number of rounds, number of voters and as an economist which interests me the most is the amount of money spent, though the exact numbers are difficult to calculate but an estimation carried out by Center of Media Studies, New Delhi tells that the figure is INR 50000 crores or $7 billion which is a forty percent increase from the last elections and mind you we have left Uncle Sam behind on this one. The results are as expected in terms of the party, though a bit too much in terms of seats (EVMs are being questioned though it is a discussion best left for another blog) but what is clearly a peoples' mandate for the ruling party is the vote share which is fifty-one per cent (the Left had 52 per cent in Bengal during their peak).  

Now the question that arises is that what will the ruling party do with this mandate and the homogeneity it has created in the society. We were known to be a hetrogenuous country which the policymakers subscribed to while formulating the policies. However, the binary that has been created in the present poses big obstacles in the path of economic development though the fudged growth figures may present a different story. The unemployment rate is at its highest and with the rise of crony capitalism, it is a bit difficult to fathom how these figures will be improved upon. The hegemony of international finance capital creates a false sense of forward movement which is used by the political class to show their positivity towards the economy, however, some studies in recent time shows that this finance capital stays for a maximum period of fourteen days in a country thereby not helping the economy in any which way apart from increasing the turnover. Education, Health and Agriculture have to be prioritised if the state and its ruler wants to be remembered as a visionary and just not as the 17th Prime Minster of India. 

The last two Lok Sabha elections have witnessed a Presidential style of electoring and the same centralisation has been carried to the PMO, thereby weakening the institutions. A fellow academician and an economist has written about his expectations about stregthening these institutions but this is very much against the grain of the party in power. The non state actors are backing centralisation as it furthers their goals and the proleteriat is caught in the mesh of religion and nationalism which blinds it to the economic pitfalls. The superstructure created on the hubris of current state actors may prove to be their nemesis.