Sunday Posts

An infographic in Indian media India's unemployment rate has reached a historical high and the government is panicking. It has rejected and suppressed the report and committed itself to inventing a new set of numbers. Members of the national statistical body have resigned, and the bad job numbers have become one of the worst kept secrets in its modern history.  As the government went down the road of obfuscation, it had also fooled itself believing that everything was fine. Once the statistical reports were questioned, the best explanation that the Head of the apex economic policy-making body could come up with was that Uber and other taxi-hailing companies have created millions of jobs in India. But then, the crisis is anything but hidden - walk on any street in any neighbourhood in any Indian city, and it is likely that you will see a few working-age people loitering, waiting or playing cards or carom in the middle of the day. IMF has recently warned that youth inactivi...

The relationship between state and enterprise has been at the heart of public policy debate for many years. There was the Nineteenth Century Liberal idea, reformulated in the Twentieth by the Libertarians, that the relationship between the two is necessarily antagonistic: The activities of the State discourage enterprise through regulations, taxes and by subsidising inefficiencies. On the other side, there were the Twentieth century ideas of the Welfare State, rediscovered as the 'Entrepreneurial State' in the Twenty-first, which posited the opposite: That the state and enterprise live in a symbiotic relationship, not just because the State creates the right environment, but also because it can enable the enterprise, by spreading education, improving health and supporting fundamental scientific research. Both are plausible arguments, and adequate empirical and anecdotal evidence can be marshalled to support either. The debate, however, has been deeply ideological, and it ...

The Middle Class is all about paradoxes.  Those who embrace Middle Class claim not to believe in classes at all, or at least in class as a determinant of human behaviour. For Middle Classes then, it's about in the middle in terms of income and not about being a class at all. In that sense, Middle Class is only a temporary, transitional, identity. Also, this 'Middle' is neither the average, nor the exact middle point and nor the most common level of earning, but rather, about being in transition - not being defined by what one is, but what one wants to be. So, the most plausible definition of the Middle Class is not about class, or a point in income distribution, but a mindset. Now what that mindset is, there is no clear agreement on that. One view holds that middle class is about striving, trying to get better, doing better than their parents did. The other is that the middle class is about an endless struggle not to be poor, by mimicking the techniques of t...

Right now, India is one exciting economic story. Its population is young and its economy is growing. The government, with a strong mandate in Union and State levels, have been introducing a number of structural reforms that the previous governments, over a quarter century, could not do. With legislative reforms, private participation in infrastructure building is becoming easier, and there is hope that India's rickety ports, faltering railways and mostly potholed roads would soon appear in a different, shiny, avatar. In a lot of ways, India is at a moment like China in the early 80s: The structural changes should unlock a steep growth, quick growth of employment and a new cycle of private prosperity. This would be a reasonable expectation but for India's deficiencies in Education and Health, which may mean that India's demographic potential would never be realised. Structural reforms and infrastructure building can create the opportunities, but without corresponding g...

Two things trigger this thought. First, the conversation I have been recently engaged into, and particularly the question, why is Indian IT Industry is not more innovative. And, second, this is about the Not-For-Profit projects which I dabble with, which concern themselves with the task of creating innovation ecosystems in India and Africa. My point is - despite all the fuss about Innovation - developing countries are doing quite poorly in innovation. Overall, the world is living in a bubble that Fredrik Erixon and Björn Wiegel will call an Innovation Illusion. There is a lot of talk and lots of people claiming that they have made a truly new thing - and media fawning over this and that - but apart from 'digitization' of some of the tasks, we are moving forward little. And, this is particularly acute in the developing world, which is doing some 'Copy and Catch-up' innovation (Tyler Cowen's term) but failing to solve their most basic problems. In more ways than...

I wrote a post yesterday on the 'crisis' of the Indian IT industry . My essential point in this was that while the Indian media sees a sudden crisis in the Indian IT sector and summarily blaming it on Trump, the problems were simmering for a long time and blaming it on Trump Administration's current or intended policies would be mistaken. And, besides, while a number of observers - Rajat Gupta, formerly of McKinsey fame (and Galleon infamy), being the latest - blame the leadership of Indian IT companies for lack of vision and inaction, I thought this was unfair, it was hard to change business models for mammoth publicly listed companies: In fact, this is exactly what these companies are trying to do, triggering all the crisis talk. However, all this don't point to a solution, which some reading the post pointed out. To this, I do not think there is any silver bullet. Many, Rajat Gupta included, have spoken about educational change, but that is neither short term n...

All our politics is Politics of Welfare. For, all our difference, between Liberals and Conservatives, the Left and the Right, can be summarised as this: 1. The Liberals want the State to tax those who earn and provide Welfare to those who do not, so that those who earn can keep themselves forever on the treadmill and those who do not can be happy with the handouts, and this should keep everyone off politics. 2. The Conservatives do not want to tax those who earn and do not want to give Welfare to those who do not, so that the former is happy and the latter is on the treadmill, and this should keep everyone off politics. These conversations are so common that one may think this was always the case. However, as we know, politics of welfare is not primordial, but rather an industrial age phenomena. At its core, it assumes that everyone can, and should, be able to find work, and it is either Unfortunate (Liberal) or Criminal (Conservative) not to be able to find work...

To me, democracy, of late, has been a disappointment. Or, to be precise, I have been on losing side of the argument all too often in the last couple of years. For example, the Indian electorate in 2014 voted overwhelming to bring in a Hindu Nationalist government: This was due to a combination of voter fatigue with the previous administration, which proved to be inept and corrupt at the same time, but I did not want a Fascist leader, which Mr Modi most certainly is, to be India's Prime Minister. Also, I was on the losing side of Britain's EU referendum, where the British electorate apparently voted for a closed economy and inward-looking society. And, indeed, like everyone else, I am now bracing for Trump victory in US Presidential election; whether or not that eventually happens, I wouldn't, like many US voters who will vote against Trump, feel elated about a Hillary Clinton presidency either, as she is only the lesser of the two hard-to-like candidates. Despite thes...

'Skills' is big on government agenda, particularly in countries like India where 69,000 people turn 25 every day. Given that only a few hundred thousand new jobs are being created in India every quarter, this means an alarming proportion of these 6 odd million people joining the ranks of the unemployed every quarter. 'Skills' is the panacea that the Government proposes, to enable a large number of people to be economically productive, either through employment or small enterprise. India is big in skills discussion, simply because of the size of the population and the problem, but many other countries are wrestling with the same set of challenges too, particularly those with expanding, and consequently young, population, and limited industry. This is an urgent social problem and the government intervention should be welcome. To this, even David Cameron's Conservatives seem to agree: Apprenticeship policy receives prime time attention in the UK and one tax that ...

Greece proposes to raise the Corporation Tax rates from the current 26% to 28% (and possibly to 29%, if needed) in the plans submitted to its various creditors, alongside other measures such as tax rises and pension savings. This immediately draws the usual complaints - that businesses would have less money to invest and create jobs - and makes an interesting contrast with the UK, where the Chancellor has proposed a reduction of Corporate Tax rates, all the way down to 18% by 2019. The rationale presented is simple - that this would attract businesses and create jobs. Both countries are technically in austerity, though in completely different economic positions. Though the welfare cuts in UK were no less severe than those proposed by the Greeks, the two countries are taking two different lines as far as businesses are concerned. Greeks are proposing to raise corporation tax - something that is completely out of fashion at this day and age - while UK is trying to become, almost, a tax...

In an insightful article in Strategy and Business, John Jullens present a view on How Emerging Markets Can Finally Arrive . This is required reading for anyone who cares about emerging markets, if only for going beyond the orthodoxy of free trade and flexible labour market. The broader point - that every market needs its own strategy and that the strategy may vary from stage to stage of development - is also extremely valuable, as this is usually overlooked in any politically tinted discussion about development.  At the core of it, this article has a China theory at its core. China is affecting a transformation of its economy, and it may just pull it off. While some commentators in the United States would say that China can not be a model for most other countries, just because of its political structure, it is becoming a model for many countries, including, for India, the alternate that these commentators would love to highlight. China has proved the naysayers wrong several t...

An old, dated piece on Kolkata, titled ' Why Kolkata will win in 20 Years ', came to my attention. There are a number of things mentioned in this article that I don't agree with: The statement that Mamta Banerjee represents the moral end of Indian politics may invoke ridicule today, and the stereotype of Bengalis as business-averse and that they would need a Bengali-speaking non-Bengali for saving is mind-bogglingly absurd. But the two key propositions articulated here - that Kolkata is one of the most sustainable of the Indian cities, and that it can be fixed with good governance - are rather self-evident. Of course, Kolkata is home and I am partial, and I shall make no claims to objectivity here. However, the fact that I keep writing about it - and indeed, there are many many people from Kolkata spread all around the world will do the same - proves perhaps that there is more to it than the dirty, dreary, poor city that the place appears to be to a casual visitor....

Kolkata is India's third largest city, its former capital and a desperately poor one. It is home for me, and whatever I write about it - and I keep writing about it - is never impartial. I can see, like everyone else, its broken politics, its stilted society, its broken infrastructure: However, if there is one city I would live in if all my wishes are granted, it will be Kolkata. This is indeed more about me than about the City, which has perhaps changed far more than I did, despite my life abroad and all that. However, this is more than nostalgia: I have never been a resident of Kolkata, living all my life in a suburb, and while I went to college in the city, I didn't know the city that well till fairly late in my life. And, this is not about its culture, which most Kokata residents are intensely proud of: While my cultural identity remains irredeemably Bengali and linked to Kolkata, I am also aware of the deep conservatism and class consciousness that pervades the Kolkata s...

The last two decades were a great time for educational expansion. The ideas of mass education caught up, not just in the West, but also in the rest of the world. Population is no longer seen as a problem, but a source of strength, of consumption and of production, and 'demographic dividend' was added to our lexicon. Personnel quickly became Human Resources and then Talent, and in this transformation, education came to be seen as the key to unlocking the great wealth that lies hidden in the teeming masses. Especially in the last decade or so, schools, colleges and universities were built at a furious pace. Governments accepted the fact that they can't build the educational capacity fast enough, and looked for ways to build private capital into education, and entrepreneurs saw this as the new frontier of opportunity. The importance of education is one thing that everyone agreed upon. Now, it is perhaps time to look back at all that has happened, and start asking an unco...

My particular interest in West Bengal should be obvious: That's home. And, with all my familial and cultural roots firmly embedded, it is unlikely that my quest to be Global makes any difference to this feeling. In fact, the more interconnected my life becomes, I feel more connected to Bengal, even more responsible. It is a chromosome thing, as Amit Chaudhuri may have illustrated, and whatever I do, I can never truly stop caring. This brings me to one of the things I always wanted to do, build a coalition of all the people who care for the place to bring together in a global conversation on what can be, should be done. Indeed, this is not about government and politics - the state's politics remains toxic - but rather a civil society thing. However, as the recent rise of Aam Aadmi Party in Delhi has shown, the civil society's moment in political conversation may have come: 2014 and its momentous election may just be the perfect time for all concerned to engage in the conve...