India at the limits

Command-and-control system failure

 

If you ever needed evidence that socialist ideology, political populism and the utter lack of governance holds India to ransom, all you have to do is to study the power crisis gripping India. For the past several weeks, the country has reeled from outages that last so long that they have become the norm; the few hours that power is available are the unusual occurrence. The gap between supply and demand is thought to be in excess of 15 percent on the average: ranging for zero in the case of Lutyens Delhi, home of the ruling class, to more than 50 percent in rural areas.

India’s power crisis bears examination because it highlights the sheer inability of the public sector edifice to meet the demands of a rapidly growing economy.

Let’s start at the source. The predominant fuel used in power generation is coal. The mining of the material is in the hands of a government monopoly, Coal India Limited, widely regarded as inept and corrupt. Faced with demands for increased production, the company actually told the coal ministry it is lowering its production target for 2011-12 by four million tons. Most analysts believe when March 2012 comes rolling around, the company will report a much bigger shortfall. In the first half of the year, ended September, Coal India fell short by 20 million tons.

Among other fuels, the government has been unable to secure assured supplies of natural gas or alternative fuels to mitigate the coal deficit.

Power generation is also largely a government monopoly run by similarly inept and corrupt public sector companies. Despite grandiose plans to increase power generation, the government achieved only 50 percent of its targets in the 20 years ending 2012. A Planning Commission official was quoted as saying that if the power ministry had succeeded in meeting its targets, the coal shortages would have been worse.

One of the key risks in the generation of power is environmental pollution. The agency in charge of ensuring that the risk is mitigated is the ministry of environment and forests, which in recent years has become a hotbed of populism. The ministry, in 2009, announced a ban on mining in forests and tribal areas. It also opposed hydroelectric projects in various parts of the country. Its views on nuclear power are also skeptical, led by fears of accidents.

Beyond that, because power supply is a concurrent subject, state governments are in charge of the distribution of power to citizens. Mostly, provincial governments supply electricity through state electricity boards (SEBs). Again, corrupt and inept, the utilities are bankrupt entities. A 2001 Planning Commission report on the working of these utilities says, “It may be noted that the information provided in the report is not always based on audited reports of the SEBs as the accounts of many SEBs are audited with a considerable time lag.”

In certain cities like Bombay and Ahmedabad, where the generation, transmission and distribution of power in the hands of private companies, the costs of power are higher but the supply is reliable. I have lived in both cities and thereafter in the US, so my first experience of a power cut was in Delhi. Things improved dramatically in the capital after 1998 when the Sheila Dikshit government privatized power distribution. Just the drastic reduction in the huge (nearly 50 percent) “transmission and distribution” losses (theft) made more power available.

India’s power conundrum provides a snapshot of the challenges policymakers faces as they try to cope with the demands of a new India. The Socialist command-and-control system simply does not work. As its hold diminished, businessmen and entrepreneurs showed that without the dead hand of government bearing down on the economy, they could work wonders.

But what the noted German social psychologist Erich Fromm called the  “freedom from” moment has passed; the “freedom to” moment of the modern economy calls for bold political leadership such as greater, crony-free privatization; it demands better-trained, more responsive and transparent government agencies.

Most of all, the burden has to be shared by citizens themselves. This is not an area of focus in public debate. It’s not just politicians and bureaucrats that are responsible for taking India forward; citizens cannot absolve themselves from the responsibility of the “freedom to” opportunity.

Here’s what I mean: on a recent flight, as the plane landed and the seat belt signs went off, I was buffeted by a rush from behind as some passengers dashed for the doorway, hoping to disembark first. There was absolutely no reason to do this because in the end we were all going in the same bus and we would arrive at the terminal at the same time.

My conclusion was that these men and women who sought to push their way up front were so focused on their personal agendas that they forgot their civic sense. If passengers disembark row by row, things get done in a much smoother and more pleasant way.

It’s the same for the traffic on the roads, though the consequences there are far more dangerous. This extends to paying taxes, avoiding bribes, evade building codes,  littering, urinating in public and all the “me-first, devil-take-the-hindmost” attitudes that make it so hard to be a citizen in India and make the public space into such a disagreeable environment.

An edited version of this article appeared in Education World, November 2011.

Copyright Rajiv Desai 2011

Capital Letter

European Odyssey: Swiss Journal 

http://blogs.timesofindia.indiatimes.com/capital-letter/entry/european-odyssey-swiss-journal-theme-for-a-gandhian-dream

Theme for a (Gandhian) dream...

Milan’s Malpensa airport is a bit like Ahmedabad airport before it was modernized. We arrived there on a hot and sultry day and waited forever to retrieve our bags. I was a bit grumpy; who would expect this in Milan, the world’s fashion hot spot? What next, I asked my wife? Rickshaw guys milling about the exit? I want my money back!

Within minutes of emerging into the arrival area, my frown disappeared. We were greeted with warm smiles by Beat (pronounced ‘bey-ut’ though our daughters often say his name to rhyme with neat) and Raul, the Swiss component of our family. As we loaded our bags into Beat’s Audi, I looked forward to the drive that skirted the city to take us into the hills of Switzerland, headed for Tessin, aka Ticino.

The picturesque Ticino canton is spread across mountainous country and is the southernmost part of Switzerland. Called Italian Switzerland, the region, I am surprised to learn, is, after Zurich and Geneva, the third largest financial center in the country.

It took us all of 90 minutes, including a stop in a farm with a tumble down barn where we bought fresh fruit and vegetables, to get to Al Ruscello, the house by the brook, in the heavenly little village of Gordola in the Locarno district. With a view of the northern tip of Lago (Lake) Maggiore, the house is Beat and our niece Lisa’s family home. On the northern side, it is surrounded by vineyard slopes that grow the local Merlot grapes. Ticino is the warmest part of Switzerland.

Lisa and Beat come here to get away from the hustle and bustle of Zurich, where they live.

Really? They need to get away from a picture-postcard city that is consistently voted the most livable city in the world? I guess it takes all kinds. Maybe the civilized 400,000 residents; maybe the smooth flowing traffic; perhaps the quiet neighborhoods and the picturesque lakefront get to them and they want to go rough it out in Ticino. But it’s just more of the same: quiet, easy, beautiful...only on a much smaller scale; Gordola’s population is just 5,000.

Even for just 5,000 people, there is a wealth of local infrastructure. Some of it is evident from  the balcony of Al Ruscello, which offers a view of local trains, commuter railroads, private boats and ferries, civilian planes and helicopters for medical emergencies. And it’s not just in Ticino; it’s all over the country: a display of civic extravagance that towers above the fabled wealth of Swiss banks and the affluence of its citizens.

Meanwhile, the superstructure is unobtrusive: the grocery store, the butcher shop, the bakery, the fruit and vegetable store appear modest and innocuous but are lavish with an abandonza of local products. It was this “local” aspect that also struck me when we visited Ticino five years ago.

In a column for a national newspaper,  I wrote:  “...isn’t this what Mohandas Gandhi said when he talked about...villages being self sufficient? ‘Every village will be a republic… (It) has to be self sustained and capable of managing its affairs even to the extent of defending itself against the whole world,’ he wrote in the Harijan, some 65 years ago, on July 28, 1946. So while the Swiss people exult in their village republics, they also have a global presence with world beating companies in pharmaceuticals, chemicals, machine tools, textile machinery and also in lifestyle brands like Swatch, Omega, Mont Blanc and even ultimately the Swiss Army.

“Sadly, in India, villages are dens of filth and inequity; major stumbling blocks to progress. As far as global brands, India now finally boasts some companies like Infosys, Wipro and Tata. In political terms, self sufficiency in India means cronyism and a seller’s market. But the Swiss version, which I experienced in Tessin, was modern and enlightened. I thought to myself: isn’t this exactly what Gandhi advocated?

“In reviewing Amartya Sen’s book, The Argumentative Indian, the historian Ramchandra Guha wrote: ‘As a multilingual and yet democratic country, India’s only rival is Switzerland.’ Guha’s review in the Economic and Political Weekly, October 8, 2005, a scathing dismissal of Sen’s book, which has become the bible of the soft left in India,  hit the nail on the head. Switzerland appears to have been the model on the basis of which Gandhi proffered his theory about village republics.”

In the five years that elapsed since our last trip to this wondrous region of the world, it appeared that things hadn’t changed much. They hadn’t deteriorated as they would in India, for sure. In fact, they might have gotten better. In the midst of the economic disaster in Europe, Switzerland held firm, bouncing back firmly from a slight downturn. In the quarter ended June 2011, the economy grew 2.4 percent and exports grew nearly six percent despite the fact that the Swiss franc appreciated sharply against the dollar and the euro.

It appeared as though this pristine little country has weathered the economic storms that are buffeting Europe. Switzerland has much to cheer about.

The dining room at Al Ruscella boasted a fireplace that served as a grill. We barbecued locally sourced beef, venison and sausage, tossed a hearty salad with local produce, selected the local white Merlot as an accompaniment to the meal, relished home-made dessert and topped the meal off with local grappa. We silently raised our glasses to the resourcefulness of the Swiss people and in thanksgiving that our extended family includes a Swiss branch.

This appeared on Capital Letter, The Times of India Blogs on November 7, 2011.

Rajiv Desai: Command-and-control system failure

If you ever needed evidence that socialist ideology, political populism and the utter lack of governance holds India to ransom, all you have to do is study the electric power crisis currently gripping India. For the past several weeks, the country has reeled from outages that last so long that they have become the norm; the few hours that electricity is available are the unusual occurrence. The gap between supply and demand is thought to be in excess of 15 percent on the average: ranging from zero in the case of Lutyens Delhi, which houses the ruling class, to more than 50 percent in rural areas.

India’s power crisis bears examination because it highlights the sheer inability of the public sector edifice to meet the demands of a rapidly growing economy. 

Let’s start at the source. The predominant fuel used in power generation is coal. The mining of this raw material is in the hands of a government monopoly, Coal India Ltd, widely regarded as inept and corrupt. Faced with rising demand for increased production, the company actually told the coal ministry that it is lowering its production target for 2011-12 by 4 million tonnes. Most analysts beli-eve when March 2012 comes rolling around, the company will report a much bigger shortfall. In the first half of the year, ended September, Coal India’s output fell short by 20 million tonnes. Simulta-neously, the government has been unable to secure assured supplies of natural gas or alternative fuels to mitigate the coal deficit.

Power generation is also largely a government monopoly run by similarly inept and corrupt public sector companies. Despite grandiose plans to increase power generation, the government will achieve only 50 percent of its target of the 20 years ending 2012. According to a Planning Commission official, if the power ministry had succeeded in meeting its targets, coal shortages would have been worse.

One of the risks of coal-driven power generation is environmental pollution. The agency in charge of ensuring this risk is mitigated, is the Union ministry of environment and forests, which in recent years has become a hotbed of populism. In 2009, the ministry announced a ban on all mining in forests and tribal areas. It also opposed hydroele-ctric projects in several parts of the country. Its views on nuclear power are also skeptical, led by fears of accidents.

Beyond that, because power supply is a concurrent subject, state governments are in charge of distribution to citizens. They supply electricity through state electricity boards (SEBs). Again, corrupt and inefficient, these utilities are mostly bankrupt entities. A 2001 Planning Commission report on the performance of these utilities says, “It may be noted that the information provided in the report is not always based on audited reports of the SEBs, as the accounts of many SEBs are audited with a considerable time lag.”

In several cities such as Mumbai and Ahmedabad, where the generation, trans-mission and distribution of power is in the hands of private companies, the cost of electricity is higher but the supply is reliable. I have lived in both cities and thereafter in the US, so my first experience of a power cut was in Delhi. Things improved dramatically in the capital after 1998, when the Sheila Dikshit government privatised power distribution. Just a drastic reduction in the huge (nearly 50 percent) “transmission and distribution” losses (theft) made more power available. 

India’s power conundrum provides a snapshot of the challenges policymakers face as they try to cope with the demands of a new India. The socialist command-and-control system simply does not work. As its hold diminished, businessmen and entrepreneurs have shown that without the dead hand of government bearing down on the economy, they can work wonders. 

But what the noted german social psychologist Erich Fromm called the “freedom from” moment, has passed. The “freedom to” moment of the modern economy calls for bold political leadership such as greater, crony-free privatisation and better-trained, more responsive and transparent government agencies.

Most of all, the burden has to be shared by citizens. This is not an area of focus in public debate. It’s not just politicians and bureaucrats who are responsible for taking India forward; citizens cannot absolve themselves from the responsibility of the “freedom to” opportunity.
Here’s what I mean: on a recent flight, as the plane landed and the seat belt sign went off, I was buffeted by a rush from behind as some passengers dashed for the doorway, hoping to disembark first. There was absolutely no reason to do this because in the end, we were all going in the same bus and we would arrive at the terminal simultaneously.  

My conclusion is that the men and women who sought to push their way up front were so focused on their personal agendas as to totally disregard their civic sense. It’s the same for the traffic on the roads, though the consequences are far more dangerous. This extends to paying taxes, avoiding bribes, evading building codes, littering, urinating in public and all the “me-first, devil-take-the-hindmost” attitudes that make it so hard to be a citizen in India, and transform public spaces into disagreeable environments.

(An edited version of this post will appear in http://www.educationworld.in, November 4, 2011.)