ZEITGEIST

DISHA ARAMBH Towards Humanism

(This write-up can be found at the Disha Arambh website: http://dishaarambh.org/)

‘All I know is this: once I was blind and now I can see.’…..John IX. 24-26 (The New English Bible)

‘India’, a fast developing globalised India, is a land with variegated dimensions. Its hallmark diversity and plurality, generally construed in anthropogenic and cultural terms, are also manifest in every whit of the general social and economic fabric that weans its persona.

The second-most populous country with over 1.18 billion people; the most populous democracy in the world; one of the fastest growing major economies in the world; and the second most favourable outsourcing destination after the United States; India is still grappling with the largest concentration of poor people in the world! Although the Indian economy has picked up much-desired momentum in the preceding decades; its growth is ruefully still lop-sided when comparing different social and economic groups, geographical regions, and rural and urban areas. A country, celebrating its 64th Independence Day today, has still ‘miles to go ahead’ before it sleeps!

Education, food, shelter, basic health care, employment, potable drinking water, children and women welfare, still remain an elusive dream for the vast multitude of masses that lay at the heart and soul of an India of the new millennium. The existing squalor and abject poverty of these ‘amputated souls of India’ are woefully exacerbated by the skyrocketing price rise to the extent that even ‘hope becomes a dream’. Disasters, floods, droughts, earthquakes, visit this South Asian giant landmass as frequent as Hillary Clinton’s sojourn in West Asia and Afghanistan. The ‘real India’, the ‘poor India’, the ‘deprived India’ and the ‘aggrieved India’; is overshadowed, camouflaged and relegated into oblivion by the new ‘rejuvenated India’, ‘shining India’, the ‘smug India’ and the ‘well preened India’, typified by pockets of affluence with the perfunctory welfare state losing its avowed track mid-way and inadvertently relinquishing its commitment to deliver what was promised. An akratic sordid saga of pain sans any prosthetic, and stifled aspirations of a better life, lie beneath the veneer of ‘Mera Bharat Mahaan’ and ‘I Love My India’ campaigns.

Truth, as always, is seldom sweet or palatable, yet it makes sane minds cogitate. Understanding the casus belli and sincere admittance of reality is the first stride towards the realization of solution and resuscitate what has gone wrong or off the track. ‘DISHA ARAMBH (Initiation of new Direction) Towards Humanism’ is one such modicum step in this direction. It is a conflux where the best of minds and activists have pooled in with the subterranean zeitgeist to enable one and everyone realise dreams, however big or small they are! It is this that imparts us a precocious outlook. Our slogan, “I, We, Us” sums up best ‘what’ we are and ‘why’ we are. Its time our ‘individualism’ combines for ‘collective’ good. Let the ethos of ‘humanism’ with the props of human values and benevolent concerns permeate and prevail catalyzing lightened up faces and smiles emerging as spoors of our effort.

The brainchild and fruition of the vision of a group of Delhi University alumnus, comprising academicians, intellectuals and promising corporate professionals, DISHA ARAMBH Towards Humanism (DATH) as a non-profit organization (NPO/NGO) came into being in the year 2010. With a mandate to operate in a wide array of social and philanthropic causes at pan-India level, the registered office of DATH is located in New Delhi, India, with international chapters in Nottingham and London in the United Kingdom; Dubai, United Arab Emirates; Democratic Republic of Congo and South Africa. With the twin principles of human values and compassion as its bedrock and unwavering will to ‘serve humanity’ at its vanguard, DATH derives its core strength from the seriousness of purpose and convergence of intent towards the accomplishment of cherished goals.

The very raison d’être of DISHA ARAMBH Towards Humanism (DATH) is to bring the downtrodden, weaker and marginalised sections of the society into the mainstream ‘way of life’…..A life where poverty, hunger, illness and illiteracy, no longer remains the dampener and every man, woman and child gets all the ingredients for holistic development …..A life where ‘security’ in all its possible connotations is ensconced with stasis, fear and uncertainty, becoming a thing of the past.

Any endeavour becomes meaningful, forceful and more concerted when it becomes the ‘mission’ of several individuals, sharing the common vision. DISHA ARAMBH Towards Humanism seeks the cooperation of every like-minded person or group so that its pursuit of goal yields optimum results. Let ‘I’ merge into ‘we’ and ‘we’ metamorphose into ‘us’ as such like-mindedness becomes propellants of change in the direction of betterment. Your association with our cause can not only add to our strength and determination, it can be instrumental in ushering qualitative difference to the lives of several souls.

He Who Saves One Life, Saves the World Entire”………….. Babylonian Talmud, Sanhedrin 4:8 (37a)

(The writer is General Secretary at Disha Arambh Towards Humanism, a pan-India NPO/NGO dedicated to the destitute, aged, orphans, women and child welfare with special emphasis on vocational training.)

 

The New Indian Government and Challenges on the Economy Front

Posted in India by Amitoj Gautam on June 12, 2009
(This article was written for Insight-India An Indian Vision, an upcoming magazine from Adelaide, Australia.
Amitoj Gautam

Shaping India's Future

As is the norm, every success comes entwined with countless expectations. Living up to expectations is a gauntlet which every victor has to take care of. Similarly, the present Manmohan Singh government is under immense obligation to deliver on several counts. The government can no longer whine about its helplessness due to the dynamics, exigencies and compulsions of coalition politics where it had to kowtow even before electorally miniscule partners. First and foremost, the Government has the onus of putting good governance on a high pedestal and reassert prime-ministerial eminence within the entire cabinet. Collective responsibility should be discernible with the new cabinet oozing with openness and accountability. Dr. Singh is known for being one of the vociferous and staunchest supporters of making ‘efficiency’ the ‘mantra’ of governance. He has to ensure that he should at least make a beginning in this direction with the ‘downward-filtration’ effect gradually percolating the novelty in other departments. Dr. Singh and his caucus need to strategize priorities regarding the upliftment of economy out of the recession morass. They need to act, and act very fast. The country needs to be financially secure again after all the upheavals sparked by recessionary ill-effects.

WHERE DOES THE ECONOMY STAND TODAY?

When the UPA government first came to power in 2004, India was indeed ‘shining’ with a healthy growth rate and booming economy. India had broken out from the shackles of ‘Hindu growth rate1’ in the year 2003-2004 with economic expansion of the magnitude of 8.5%, the highest ever except in 1975-76 and 1988-892. The economy maintained its resilience in terms of growth, inflation and balance of payments (BOP), with the domino effect on consolidation of the growth momentum and macro-economic stability. The global economy was on upswing and so was India gaining from increased demand for merchandise and service exports. However, today growth has dwindled and nosedived from a peak of 9.6% of 2006-2007 and an average growth of 8.9% in the initial four years of the previous UPA government, to a much lower rate of 6% in the last fiscal. In the maximum drop in over a decade, India’s merchandise export was estimated to have gone down by 33.3 per cent in dollar terms in March 2009.  Even in the ‘State of Economy’ report released by the Confederation of Indian Industry (CII) on May 2, 2009, India’s gross domestic product was estimated to grow to 6.1-6.5 per cent in the current fiscal, much below the growth target of the Eleventh Five Year Plan (2007-2012). Prime Minister Manmohan Singh has raised a glimmer of hope with his assertion that that the new government will accelerate the reform process and would work with states in tandem for ensuring the implementation of the National Rural Employment Guarantee Act, Rural Health Mission, Urban Renewal Mission and populist welfare programmes targeted at poor, destitute, minorities and backward sections of the society.  “The election verdict is for inclusive growth. It is a verdict for equitable development. It is a verdict for a secular and plural India,” Mr Singh said. Coming down to global meltdown, Dr. Singh renewed his pledge that “India will have to continue to keep its savings and investment rates high and become more globally competitive, so as to be able to “face global economic challenges.” So the new government is faced with a situation where it needs to dovetail several measures aimed at resuscitating the ailing Indian economy, viz., perking up consumption, creating employment opportunities, propel the sluggish economy on an upward trajectory and restore the nation’s depleted and exhausted finances. The government also needs to assure healthy investment from both and public and private domains, enthuse economy with further stimulus packages, accelerate reform process, create markets and reduce fiscal deficit. So Dr. Manmohan Singh’s dispensation cannot afford to remain oblivious of the challenges before them with equal attention on the invisible, yet very much tangible constraints.

WHAT CAN THE GOVERNMENT DO TO STEM THE ROT?

The new government can make a beginning with reversing the recent trend of a balanced fiscal policy being substituted by the expansionary one. It can chart a new plan for fiscal consolidation by September-October of this year. This is the time when the analysts are expecting economy to experience revival symptoms. In the intervening period, however, it is needed to utilise fiscal space of about 2% of India’s GDP, generated by the decline in global prices of commodities and the consequent decrease in subsidy burden on the government, for bringing another stimulus package to the economy. The previous government had, in the interim budget, spelt out its blueprint for the reduction of fiscal deficit to 3 per cent and revenue deficit to zero by the Twelfth Five Year Plan. But, for the accomplishment of these twin goals, the government will require legislations in the nature of the Fiscal Responsibility and Budget Management Act 2003. India’s early growth trajectory was very much shaped by high savings and equally higher investments which, however came down from 39.1% in 2007-2008 to 35% in 2008-2009. The UPA-2 needs to re-invigorate this. One way is to harness the vast reservoir of India’s huge domestic savings, of the magnitude of 38% of the annual output in value terms, and channelise it into financial markets. It is unfortunate that at present only about half of this pool is invested in form of financial assets, with the chunk being locked in land and other assets. Domestic savings can serve to substitute foreign funds in terms of investment. The government also needs to look into the overseas borrowing norms for the NBFCs3 (Non-Banking Financial companies) which are bank like firms, deprived from the right to issue cheques or offering savings. It is ironical that private NBFCs are discriminated from accessing funds from IIFCL, the state-run India Infrastructure Company which was set up with the primary objective of availing funds to infrastructure projects. The government must bring private NBFCs at par with state-run NBFCs in terms of availing funds from IIFCL and restructure the borrowing norms for both public and private NBFCs. Juxtaposed to these structural changes, what is desperately required is to bring another company law with new auditing norms so that Indian economy is immunized against fraud of the nature of the Rs. 7,000 Satyam scam. The Manmohan Singh government needs to operationalise the Competition Commission of India which can regulate corporate behaviour and prevent big businesses from acquiring monopolistic hegemonies, thereby ensuring healthy competition in the market. India needs to strike balance between laissez-faire and welfare economics. Keynesian4 economics retains its primacy even today!

DISINVESTMENT, FDI AND EXPORTS

The new government also needs to intromit a fresh lease of life in the stalled disinvestment programme. UPA-1 could raise just Rs. 8,500 crore in the five years of government in stark contrast to Rs. 28,000 crore raised by the NDA government in the preceding five years period. So Dr. Manmohan Singh not only needs to come out with a new disinvestment policy, but he also needs to unwind the National Investment Fund (NIF) which was set up for the receipt of funds accruing from the disinvestment process. What the government can do is to re-route the funds to the Consolidated Fund of India so that it can simultaneously be used in the reduction of fiscal deficit5 and cutting the borrowing needs of the government. The new government is also required to unveil a new Foreign Trade Policy and facelift the Foreign Direct Investment Policy with parallel attention towards the effort needed to put Indian exports back on the track which was hit due to the global recession and concomitant fall in demand. India cannot be blind to the over-enthusiastic embracing arm shown by China, Brazil and Russia in attracting FDIs6. The government needs to further liberalise FDI norms and bring some modifications in the FDI guidelines announced by the government earlier in February 2009. In February 2009 FDIs inflow to India was a paltry $1.4 billion, one-fourth of what was registered in the same month in 2008. The guidelines issued in February as a response to this development does not count investment, made through companies owned and controlled by Indians, in the calculation of foreign investment while investments by those companies which are majority foreign-owned are considered as foreign investment. This had the debilitating and frustrating effect of converting the investments made even by India’s private sector as foreign investment. A dampener it was, the government needs to come out with reforms in this arena also. However, the most daunting task before the incumbent government is to re-energise the export sector which has been witnessing negative growth since the last eight months, registering a growth of just 3.4% in 2008-2009. Exports fuel India’s GDP to the extent of 17% of the total. Lot of work remains in the area of trade-agreements also. Contentious issues arising from the Doha round of WTO negotiations also need to be sorted out. Signing FTA (free trade agreement) with ASEAN (Association of South East Asian Nations) will open up &1.1 trillion South Asian market, bringing the much-needed respite to the Indian exporters who have had been reeling under the impact of evaporation of demand from the recession-hit West. ASEAN comprises about 9.5 per cent of India’s global trade.

MULTI-FACETED POLICIES ARE NEED OF THE HOUR

The new government also needs to needs to attend to the needs of two primary sectors of agriculture and industry. Agriculture, despite its miniscule contribution (17.5%) to the GDP, still remains the mainstay of Indian economy because of its high share in employment and livelihood creation. India achieved high growth in farms sector from 2003-2004 to 2007-08, but it is now experiencing low growth. If India is to repeat and sustain its more than 8% growth rate on a continual basis, farm sector has to grow at 4% which is improbable until and unless technology is transferred to the farms. Similarly, Indian industry, too, needs multiple antidotes as shrinkage in exports coupled with recession hit industrial production severely, and indirectly affecting employment scenario. As agriculture and industry are the prime absorbers of skilled and un-skilled workers, it is high time for the new government to put these two lynchpins of Indian economy back to smiling mode. Attainment of energy security should also be one of the top-most agendas of the new government. The UPA government needs to push reforms in the energy sector by providing seven-year tax-exemption for natural gas production, deregulating auto fuel prices, and making the subsidy regime more target-oriented. Rural electrification as mentioned in the Congress manifesto, reduction of aggregate and technical losses and curbing power distribution losses need a renewed thrust. India’s power generation capacity stands today at around 1,47,000 MW (Megawatt)  with the Eleventh Five Year Plan envisaging addition of further 78,500 MW. With most of the conventional sources reaching optimum-limit to the point of exhaustion, the country needs to accelerate generation of nuclear energy and tap other renewable sources of power. The Indo-U.S. Nuclear agreement may prove to be a big boon in India’s stride towards energy security. Development, in the true sense of the expression, means economic and social development. So the government needs to extend the social safety nets especially in areas of food supply, job creation, education and proper health and medical care. One of the most effective tools for poverty amelioration is high and sustainable growth. The Manmohan Singh government is also expected to bring reforms in the infrastructure sector with special emphasis on roads, ports and urban development. Public-private partnership in the transport sector is particularly expected to gain momentum. More bandwidth allocation and advent of 3G7 spectrum are on the anvil in the telecom sector. No less important is the listing of state-owned Bharat Sanchar Nigam (BSNL). In the aviation sector, the government has to extricate the major airliners out from the financial crisis. The airline industry suffered severe losses, to the extent of Rs. 10,000 crore, in 2008-2009. The three Indian airline giants, viz., Air India, Kingfisher and Jet Airways, have a debt of about Rs. 30,000 on their heads. The government ought to bring a new aviation policy which allows domestic carriers to fly overseas.

EXUBERANT MONEY MARKETS!

The Manmohan Singh government is going to exercise tremendous influence in the shaping up of Indian markets. Though, going by the current inklings, Indian markets are more guided by global financial developments than the domestic polity wielding any major influence. Ever since Dr. Singh picked up the reins of power in his second innings, the markets have responded enthusiastically with the month of May proving to be the best in a decade. Investors at the Dalal Street picked up gains of 28% in May 2009 making it the best month in the last decade. Indian stock markets became fatter by $4.1 billion in May. Foreign Institution Investments (FIIs8) are expected to keep the market buoyant in the near future. In another development, Indian companies trading on American bourses, i.e., ADRs9 (American Depository Receipts) were witness to the thriving of their total market value in the excess of $20.41 billion in May, with ICICI Bank and Wipro accounting for about fifty percent of the total market capitalisation. The prevailing market sentiment was again exemplified by the addition of $6.4 billion to the foreign exchange reserves, comprising foreign currency assets, gold and drawing rights with the IMF (International Monetary Fund) in a single week and total of $9 billion accruing in three weeks of May ending 22.  These are highest growths in more than a year. However, much of this addition came through the portfolio route10 and was accounted by non-dollar assets with the negative trend of government borrowing from the RBI under the WMA11 (Ways and Means Advances) continuing unabatedly. Analysts believe that this current trend is unsustainable as there still remains a wide cleavage between fundamentals and the market. This gap needs to be narrowed down thorugh the stimulus packages12. Disinvestment can serve to provide funds for pushing the primary market13 which, in turn, can bolster the secondary market14. The presence of a stable government at the Centre is also a major booster for creating an Indian banking supergiant. The previous government had taken initiative for the merger of State Bank of India, the country’s largest bank, with six of its associate banks, but the Left aborted the move. Bringing the cost of credit down should also be one of the priority areas of the new government with an emphasis on priority sector lending.

INFRASTRUCTURE AND REALTY SECTOR NEEDS DOVETAILING

Last, but not the least, the new UPA government has to bring the real estate market back on its track. This sector has witnessed steep fall in its fortunes in the last year. In this tumultuous period, the Non-Resident Indians from the U.K., the U.S., Canada, have provided a lifeline to the realty sector by lifting its spirits. Even in such hard times, the deep-pocketed and influential NRI15 community has been on a house-purchasing spree whether it is in Delhi or NOIDA. Far away from their motherland, the ever nostalgic NRIs have been at the vanguard when they were perhaps needed the most. Now, the government can infuse life in this sector by bringing down the interest rates within the reach of common man. Analysts point out a modicum step of bringing down the interest rate by 2% can reduce the EMI (Easy Monthly Installment) on a similar earlier loan for 20 years by about 13%, enabling house-seekers to have their own roof. An improvement in the real estate sector will follow once the banks return to their aggressive lending. Liberalizing of FDI norms in the sector will serve to bring down the prices. The Manmohan Singh government’s thrust on infrastructure development in form of roads, electricity, and water supply has beneficial effects for the real estate sector as well. These developments would free quantum of land for housing development. The policy-makers can also focus upon the development of infrastructure in the countryside, Tier II and Tier III cities and satellite towns. The existing cities are already over-populated, over-crowded and over-exploited. They have already reached saturation point where only vertical expansion is possible. In big Indian cities, only the sky is visible as the horizon has vanished in the maze of housing jungles! But this is fraught with serious consequences as it distorts the man-land balance, putting natural resources like water-table under severe stress. Besides, exerting stupendous pressure on the land means that even fertile lands which should normally be earmarked for food-raising is also encroached upon without any compunction, jeopardizing the already vulnerable environment. Fanning out is the only pragmatic solution left which should be vigorously pursued. What matters the most is connectivity! So the government needs to bring out a holistic plan in which infrastructure and real estate development can go hand-in-hand. With Dr. Manmohan Singh heading a stable government, strategic investors are once again taking interest in the real estate sector with foreign funds raising money for investment. Milestone Capital Advisors, ASK Investment Holdings, Morgan Stanley Investments, and Birla Life Asset Management Company are some of the mutual funds16 which have taken lead in raising funds for investment in the real estate sector. In this direction, while ASK Investment Holdings has set up a Rs. 500 crore PMS fund, Birla and Milestone have announced their plans to raise Rs. 2,500 crore and Rs. 600 crore respectively for investments in the realty sector. So finally the realty sector seems to be on its comeback mode as all these mutual funds have promised annual returns in the vicinity of 20-25 per cent. In nutshell, real estate sector is really getting warmed up! If the Indian real estate sector is getting warmed up, no less important is the avenues which have opened up before Indian HNI17 (High Networth Individual) investors in an age vitiated by global recession. The downfall of real estate markets across the globe has led to crash of property prices in developed countries like U.S., U.K., Australia, South Africa, and Singapore. This has triggered a marked increase in demand from Indian buyers interested in making investments in overseas property. Globalisation has indeed weaved global economies!

NRIs AND NEW INVESTMENT OPPORTUNITIES

With Dr. Manmohan Singh calling the shots again, the Non-Resident Indians (NRIs) widely distributed all across the planet earth, have before them a new window of opportunities beckoning them. The Indian governments in the past had opened up the economy for FDI which was warmly embraced by the NRIs. With reform process getting another boost up in the form of Dr. Singh, NRIs can invest in banking, housing, insurance, education and multitude of other sectors more conveniently. While in the banking sector, NRIs/PIOs are entitled to access loans both on repatriation and non-repatriation basis; the Indian government has ensured that housing finance institutions approved by the National Housing Bank and the Commercial Banks offer housing loans to them at status par with an Indian resident. Insurance Companies like the National Insurance Company avail of NRIs with special insurance schemes. NRI bonds and Development bonds are some of the special schemes offered by the Indian government to the NRIs for making hassle-free investments. With the markets’ exuberance amply lucid since the formation of new government in New Delhi, the investors in general and NRIs in particular can feel enthused. They can feel at ease while investing in domestic mutual funds and shares, government issued instruments, and convertible and non-convertible debentures issued by an Indian company. With around 40% of world’s top Fortune companies making India the seat of their operations, Goldman Sachs’ continuous infusion of investments in Indian real estate and infrastructure sectors, and Morgan Stanley’s more than belief in returns from investments in India, the NRIs can, too, exude the same-old confidence which they have always posed in India. With Dr. Singh at the centre-stage, there is no room for negativism and inhibitions. The Manmohan Singh government’s plans to tighten the KYC18 (Now-Your-Client) norms for mutual fund investments in order to curb the flow of black money into the Indian capital market is a testimony to what the new government is all about! It is noteworthy that recently the British NRIs led by Balwant Kapoor, President of the Indian Overseas Congress of Britain, pledged to contribute their mite, how modicum it may be, in India’s development and economic prosperity. What Mr. Kapoor has done needs to be emulated everywhere across the globe.

Footnotes

  1. 1. Hindu rate of growth refers to the low annual growth rate of the Indian economy before 1991, which stagnated around 3.5% from 1950s to 1980s.
  2. 2. A growth rate higher than 8 per cent had been achieved in the past in only three years: 1967-68 (8.1%), 1975-76 (9.0%) and 1988-89 (10.5%).
  3. 3. A non-banking financial company (NBFC) is a company registered under the Companies Act, 1956 and is engaged in the business of loans and advances, acquisition of shares/stock/bonds/debentures/securities issued by government or local authority or other securities. NBFCs perform functions akin to that of banks; however they cannot accept demand deposits; are not a part of the payment and settlement system and as such they cannot issue cheques drawn on itself.
  4. 4. Keynesian economics argues that private sector decisions sometimes lead to inefficient macroeconomic outcomes and therefore advocates active policy responses by the public sector, including monetary policy actions by the central bank and fiscal policy actions by the government to stabilize output over the business cycle.
  5. 5. Fiscal deficit is the difference between the government’s total receipts (excluding borrowing) and total expenditure. Fiscal deficit gives the signal to the government about the total borrowing requirements from all sources. The primary component of fiscal deficit includes revenue deficit and capital expenditure.
  6. 6. FDI or Foreign Direct Investment is any form of investment that earns interest in enterprises which function outside of the domestic territory of the investor. For an investment to be regarded as an FDI, the parent firm needs to have at least 10% of the ordinary shares of its foreign affiliates.
  7. 7. 3G is the third generation of telecommunication hardware standards and general technology for mobile networking, superseding 2.5G.
  8. 8. FII is an investor or investment fund that is from or registered in a country outside of the one in which it is currently investing. Institutional investors include hedge funds, insurance companies, pension funds and mutual funds. The term is used most commonly in India to refer to outside companies investing in the financial markets of India.
  9. 9. An American Depository Receipt (or ADR) represents the ownership in the shares of a foreign company trading on U.S. financial markets. ADRs enable U.S. investors to buy shares in foreign companies without undertaking cross-border transactions.
  10. FDI is defined as a company from one country making a physical investment into building a factory in another country. The direct investment is in contrast with making a portfolio investment, which is considered an indirect investment. FIIs, NRIs, and Persons of Indian Origin (PIOs) are allowed to invest in the primary and secondary capital markets in India through the portfolio investment scheme (PIS). Under this scheme, FIIs/NRIs can acquire shares/debentures of Indian companies through the stock exchanges in India.
  11. WMA is a facility under which the government (state as well as the centre) can borrow from the central bank to meets its daily revenue mismatches.
  12. A stimulus package is a combination of several measures to get the economy moving (stimulated) again. The basic purpose behind such a package is to get money into people’s hands to get them spending, to get banks to loan money, and get people jobs.
  13. Primary market issues new securities on an exchange. Companies, governments and other groups obtain financing through debt or equity based securities. Primary markets are facilitated by underwriting groups, which consist of investment banks that will set a beginning price range for a given security and then oversee its sale directly to investors.
  14. Once the initial sale is complete in primary market, further trading is said to conduct on the secondary market, which is where the bulk of exchange trading occurs each day.  It is where investors purchase securities or assets from other investors, rather than from issuing companies themselves. The national exchanges – such as the New York Stock Exchange and the NASDAQ are secondary markets.
  15. Non-resident Indians are people of Indian origin who are born outside India or people of Indian origin who reside outside India. Persons posted in U.N. organisations and officials deputed abroad by Central/State Governments and Public Sector undertakings on temporary assignments also come under the umbrella of Non-Resident Indians.
  16. Mutual Fund is an investment vehicle that is made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments and similar assets.
  17. HNI is a classification used by the financial services industry to denote an individual or a family with high net worth. The most commonly quoted figure for membership in the high net worth “club” is $1 million in liquid financial assets.
  18. In its drive to stem the flow of black money into the capital market, the Indian government plans to further tighten Know-Your-Client (KYC) norms for mutual fund investments. Currently, KYC norms are applicable only for investments of Rs 50,000 and above.

INDIAN ELECTIONS 2009

Posted in India, Social Issues, Thoughts & Reflections by Amitoj Gautam on June 12, 2009
INDIAN ELECTIONS 2009-A POLITICAL PERSPECTIVE(This article was written for Insight-India An Indian Vision, an upcoming magazine for NRIs from Adelaide, Australia. The article can be accessed online at http://insight-india.com/?p=19)..Reference to this article is found in the Summit Report of the 2009 Global Forum on Modern Direct Democracy held in Seoul in September 2009 (http://www.iri-europe.org/fileadmin/user_upload/media/Booklet-Dok.pdf)
Amitoj Gautam

Sonia-Manmohan-1“Mankind will never see an end of trouble until lovers of wisdom come to hold political power, or the holders of power become lovers of wisdom.” ….Plato in the ‘Republic.’ Nothing brings out the appositeness of what the great Greek philosopher uttered in the classical period, than the recent elections to the 15th Lok Sabha in India. In the world’s biggest exercise in democracy, bitterly contested by some 360 parties and plethora of independent candidates in a month-long process spread over five phases, the ever unpredictable and enigmatic Indian electorate, braced up with choosing among a bewildering variety of symbols, ackratically divergent issues and cacophonous claims and counter-claims over moral and secular credentials, did what is expected of sane minds to do. They chose stability and continuity over chaos, efficiency over jargon, inclusiveness over exclusiveness, assimilation over revanchism, secularism over communalism, responsible and serious governance over media-created ‘India Shining,’ and finally nationalism over regionalism. And, when the results to the elections came out on May 16, 2009, it was amply manifest that if there was an entity that came out mature in terms of judgment; it was the ordinary Indian who handed over to the Congress, the 124 years grand-old party, the mandate of presiding over the fate of India for another five years. In realistic terms, the victory has been the best from the Congress in the last two decades ever since Narasimha Rao somehow managed a ragtag coalition in 1991. The resounding victory prompted Manmohan Singh back to the saddle again when he, along with his colleagues, was sworn in on May 22, 2009, in the first phase of government formation, thus becoming the first after Jawaharlal Nehru to have stormed back to the reins of power after the consummation of the first stint. Even the most astute in the analysts’ fraternity wouldn’t or couldn’t have imagined the ‘unpolitical’ Sardar making a comeback, and that too in such élan.

Barring aside the positive reactions that came from different quarters, from within or without, the Indian industry was unanimous in welcoming the return of the United Progressive Alliance (UPA) to power. The UPA ensconcement in the South Block was unequivocally embraced by the Indian industry and market as a verdict for unbridled growth, and ‘development’ in every sense of the term. So it didn’t come as a surprise when the Confederation of Indian Industry (CII), the Federation of Indian Chambers of Commerce and Industry, and the Associated Chambers of Commerce and Industry of India (Assocham) whole-heartedly welcomed what the Indian electorate had proffered. They deciphered in the new government that will, proclivity and conviction to bring the country back to track amidst the overall ambience marred by the current global recession. A clear reflection of how far will the new government be conducive for growth and prosperity, the rupee shot stronger by 152 paise or 3.08 per cent to a high of 47.88/89 on May 18, 2009, against the dollar on the likelihood of heavy injection of capital in to the economy in the impending months. Stock Markets also espoused the sentiment prevailing in other quarters with a gain of 2110.79 points in one single day. The Dalal Street suddenly seemed to have come out of the fear that had overwhelmed and gripped it ever since recession raised its nefarious tentacles in August 2008. All these trends and symptoms when seen holistically, buttress and vindicate the faith that the vast multitudes of India have posed in the old government again. After all, markets don’t run on mere sentiments. Sheer economics rule how they comport and explain the casus-belli behind their finickiness. They turn volatile even at the slightest prospect of instability, they turn wildish when things go as they prefer. So overall, what the market has found in the new government is assuredness of stability and a catalyst to wholesome development. With Dr. Singh at the helm of affairs, these expectations do not seem preposterous.

Analysis of the result

The 2009 general election was an election which belied the best of political pundits and analysts who had oft-repeatedly projected a fractured mandate again, much like what transpired in the year 2004. It was not before the fifth and last phase of the election that the NDTV pragmatically projected the UPA to emerge as the largest alliance in the Lok Sabha with 216 seats and the NDA expected to get 177 seats. In relative terms, the projections this time were, however, far more near to reality than what had happened in 2004 when some political think tanks gave the NDA seats in the vicinity of 240 to 250.  The ‘India shining’ campaign not only foxed and bamboozled those who were behind its genesis, it served no good even to the mentors, i.e., the BJP and its umbrella grouping, NDA, which finally had to be content gracing the Opposition benches in the 14th Lok Sabha. So, though not up to the mark, the projections were at least not absurd or disastrous this time. It wouldn’t be injustice and condescending if the entire act of exit polls for the 2009 elections is at best termed as an act in ‘trend-reading’ and not projections per se.

A microscopic appraisal of every whit that came to wean and constitute ‘Election 2009’ makes one thing lucid unambiguously—the projections somewhere missed out that it was 2009 and not 2004.  Amidst the din caused by Varun Gandhi’s vitriolic speeches, and over-inflated ambitions of local satraps like Lalu Yadav and Mayawati assuming more than life proportions, the Congress-led UPA (United Progressive Alliance) won handsomely to the extent that ‘kingmakers’ suddenly metamorphosed into ‘paupers’ with no one even looking up to them for providing that frequent succor synonymous with the period 2004-2009. The Congress won 206 seats out of the 543 which went to polls and the UPA churning out a comfortable, though marginally inadequate, 262 seats finishing ten short of a simple majority. The Bharatiya Janata Party-led NDA (National Democratic Alliance) finished well short of the magical figure with a total tally of 158, marking the political obituary of Lal Krishna Advani. The man who spearheaded the ‘Ramjanmabhoomi Movement,’ the man who orchestrated the dismantling of the Babri Masjid, and the man who was widely perceived as the hinge of BJP and widely hailed as the modern incarnation of Sardar Vallabhbhai Patel, became the man whose dreams were pulverized and brought to a dead-end on May 16, 2009. Suddenly Advani has become anachronistic in today’s polity. The phoenxian rise, the crescendo, which the BJP had been witnessing over the yesteryears, has suddenly been jolted and ossified midway. The Third Front, a motley association of the Left Parties, BSP and others, suffered disgraceful defeat relegating it to political inconsequence even in its traditional strongholds in Kerala and West Bengal. Prakash Karat, the maverick Leftist leader, led the Left from 59 to 24 seats, the worst performance of the Communists since 1952. The Fourth Front spearheaded by Lalu and Mulayam Yadav did no better, despite the fact that the Samajwadi Party did well by emerging as the single largest party in the split verdict of Uttar Pradesh.  But, if there was one man who proved everyone skeptic wrong in predictions, he was Dr. Manmohan Singh who rightly said after the verdict was out: “The people of India have spoken, and spoken with great clarity.” He was true as was his government became the first coalition government to be back in power after a full term. On the regional front, the states which went to polls along with the general elections, i.e., Andhra Pradesh, Orissa and Sikkim, also saw clear mandates. The mandates which Y.S. Rajashekhara Reddy in Andhra Pradesh and Naveen Patnaik in Orissa, have got is a mandate for good governance, secularism and stability. Incumbency factor didn’t come in their way! Similarly, B.S. Hooda in Haryana, Sheila Dikshit in Delhi, Narendra Modi in Gujarat, Shivraj Singh Chouhan in Madhya Pradesh, Ashok Gehlot in Rajasthan, and Nitish Kumar in Bihar, were all able to muster votes for their parties in an incredible fashion. After all, Lalu Yadav sitting pensively and remorsing over the election results, ‘Netaji’ Mulayam Yadav and his showman Amar Singh dieing to prove the Samajwadi Party’s indispensability in new government-formation, ‘Behenji’ Mayawati fretting and fuming over results, and Sharad Pawar eyeing the top-most job in the country, was nothing short of an spectacle none would have dreamt of seeing! In this election, everything seemed to be possible in each politician’s lexicon! Perhaps sky was the limit which could satiate their hunger for power.

Rahul GandhiThe election 2009 can be called the triumph of one man, Dr. Manmohan Singh. Amidst the vociferous attacks against Mr. Singh by Lal Krishna Advani and his cohorts, the country, especially the bourgeoisie, seemed to have stupefied at the very probability of having some illiterate and uncouth politician shaking hands with Barack Obama, or delivering speech at the United Nations.  Some say fear is the conscious expression of subconscious mind. The Indian middle classes in particular and the vast masses in general, were seemingly aghast at some regional ‘neta’ coming to power due to their own creation of throwing up uncertainty in New Delhi. The hoi-polloi was already reeling under increasing joblessness, sky-rocketing prices of essential commodities, and finding it tough to make their pockets listen to what their needs were.  In such an uncertain environment where everything seemed to be going tough and tortuous, there was one man whom they could trust. So it was an amalgamation of realism coupled with optimism that propelled the Indian people to act decisively. Dr. Manmohan Singh became the best bet that the country could ill-afford of not having in such a precarious time. The covert desire for stability and responsible governance was no less important. So the ‘Manmohan factor’ is not a monolithic factor, rather it is a close concatenation of several factors, the soul of which permeated every porous mind. The 2009 elections marked the political ascension of Rahul Gandhi as well. The Prince Charming of Nehru-Gandhi dynasty held 106 rallies in all, and politically pervaded 230 constituencies with his sheer presence. His campaigning, though guided much by his Team One, catapulted him to be the busiest campaigner for the Congress to the extent that his mother was suddenly relegated to play the second fiddle. Refraining from any political diatribe and focusing on the local issues served Rahul well in terms of imparting a new freshness Indian polity desperately seeks today. People remembered his ‘Kalavati’ speech in the previous Lok Sabha where he preferred to speak on the agonies of common people in the Vidarbha region, rather than on the Indo-U.S. Nuclear agreement which the major political parties were deliberating upon then. Resembling his father, the maturing Indian populace could delineate in him the spoors of Rajiv Gandhi. Vocal and non-sparing in his criticism of any non-performing government seems to have struck right chord where it should have been. So, in a sense the election has seen the arrival of Rahul Gandhi in a big way. He is going to stay and that too in a grand style. The people of India have got a future Prime Minister in the making. Only time will tell when the Congress decides to transfer power to the precocious Rahul!

The 2009 Indian election was an election where almost 8,000 candidates affiliated to 369 political parties were in the fray. However, at the end of the election, only 36 parties could succeed in sending more than one ‘winner’ to the Lower House of Indian Parliament with more than 300 parties failing even to open their account. A close look at the composition, of those who were fortunate enough of making it to the Lok Sabha, reveals that there are 150 new Members of Parliament who have criminal antecedents and at least 73 of them have grave criminal charges in abeyance against them. So apart from the euphoria over the victory of democracy in this South Asian giant nation, we are also faced with a situation where crime and polity are moving juxtaposed to each other. This is one area where the Indian policy makers have to do some introspection and look towards a future where such personalities do not behove the Lok Sabha benches. Such cases should be a rarity, not the norm. On the brighter side, it is indeed a matter of great pride that about 60 women were elected to the Lok Sabha. Indian democracy has never seen such a large contingent from the fair sex! This augurs well for the future where gender equality could be a goal worth pursuing. Looking at how big purses fared at the election, it is nothing less than revelation that there are about 300 crorepati Members of Parliament in the new House. The 14th Lok Sabha had 154 such MPs. So an increase of about 94.8% in the gross number of crorepati MPs shows how money power still wield a major role in Indian elections. India seems to be toeing the U.S norm again! The age-pyramid of the newly constituted Lok Sabha reveals that it is becoming younger. In comparison to 2004, the 2009 Lok Sabha has 82 MPs whose age is less than 42 years, implying that there has been infusion of young blood in a house dominated by senior citizens. Last, but not the least, history was made when four members of the Nehru-Gandhi family got elected this time.  So Varun and Maneka Gandhi, sitting in the same house with Sonia and Rahul Gandhi on the treasury benches would be an interesting view. Overall, the 15th Lok Sabha is a variegated House with several dimensions stemming from its composition. It is as diverse as is the Indian nation, yet it is a cauldron for change and transubstantiation.

Conclusion

The Indian elections have thrown open a vast range of opportunities before the Manmohan Singh government. Though the government is still a coalition one, yet it will have enough stability and much-required space where growth and sustainable development can be pursued in a more prioritized and systematic manner. With Dr. Manmohan Singh, the architect of liberalization, India can now look forward to have a future where the well-being of common people gets adequate attention; where regionalism and nationalism can co-exist with the former subsuming in to the latter; where bread and butter hogs much media space than ‘Mandir’ or ‘masjid’, where people are polarized on issues of national importance and not on the basis of caste and creed; and where economic growth becomes the anthem of governance. India can now also imposit itself in international affairs, welding the North and the South blocs around its fulcrum. The Indo-U.S. nuclear agreement was perhaps one single issue where the venerable Indian parliamentarians locked their horns over some ‘issue’ of national importance. The helplessness of what happened then to the UPA government will perhaps not be repeated this time. Horse-trading, MPs hurling packets of notes while the full House was in strength, were some of the ugly reminiscences of the previous Lok Sabha. Self-sustaining entrenched interests have to make way for common interest. A pan-India interest needs to take centre-stage now. The soul of India has voted for change in the direction of betterment. The government needs to be alert on this count as performance should match expectations. In the Oscar winning 1992 Al Pacino movie “Scent of a Woman, there was one sentence worth remembrance: “There can be no prosthetic to an amputated soul.” Our Prime Minister and all the parliamentarians need to remember this!!!

By Amitoj Gautam