The Cosmetic democracy

When grassroots democracy was proposed in this country, everybody thought it would be a new beginning altogether, and rightly so because in no other country so much of people running in lakhs were directly elected by the people and managed their own affairs, the democratic institutions found new expression inform of mukhiya, sarpanch, panchayat samiti, block pramukh, PACS, fishery institution, trade bodies etc apart from legislature at central and state level. The underlying foundation of these institutions efficiency was a believe that they will work on the principles of ‘enlightened self interest’ which means that in the pursuit of  their own self interest they will  promote the interest of the masses, thus arising at overall efficient for all solution. It was believed that if they are given the financial power of building a school in their own village, they will use the best material, knowing that collapse of the building will endanger their own children lives.

That seems to be quite a fairy world, but in reality thing started deviating from the ideal solution, as they were given financial power to build a school they started siphoning off money and send their kids to a private school, thus having no danger of getting them injured if building collapses, this is only an example which envelopes larger policy issue and core questions of sustainability of this model in the entirety. Let’s see why did it happen?

Democracy at very micro level created micro constituencies, since the level of education is low the entire exercise of winning votes and garnering supports stood on the single ground of how much benefits they could make available to these constituencies, another way of securing loyalty was caste line, which increasingly made one caste hostile to another in the same small unit of village, moreover people supporting the rivals can easily be identified and targeted in the micro constituencies, financial power in too much of hands created fractured decision making leading to waste of public money in many cases.

In celebrated scheme like MNREGA, mukhiya in collaboration with local officials increasingly favoured own people denying opportunity to all, chose site for public assets creation in favoured land and thus made money, what else explain the phenomenon of still continued migration from rural areas. A back of the envelope calculation suggests that a mukhiya spends nearly 8to 10 lakhs on an average in the panchayat election.

I am not against democracy, my contention is very simple, is giving premature financial power, the only way to strengthen democracy at grassroots level, shouldn’t we wait before there is actual capacity building.

The fool’s declaration

I am not a reactionist person generally, but the title page of the economist ‘the great declaration’ compels me to do so, it say that the great declaration means that emerging economies including India days of turbo charged growth rates are over and they will be no more in position to incash weakness of rich economies, they will no longer be able to catch up with the rich economies as fast as they did in 2000s.

First, the basics, which says that the growth rates cannot be kept ever rising and they are always prone to cyclic fluctuations, what India added in 2008 to its total output  is roughly equal to what it had added in 2012 in absolute terms, because in 2007 base was low while it was higher in 2011. The important thing is the fundamentals of the economy which comprises investments, savings, institutions, inflation etc. Compare to 2000s there is hardly any decline, and even if they are, it’s just marginal decline which primarily reflects the global conditions.

Second, BRIC countries grew not because rich were troubled, but because they embarked the path of conscious economy building, generating surpluses, reviving industries, instilling reforms, while rich countries did the opposite, so even if rich countries have realised their mistakes and started painful corrections it is no way going to block the growths of these countries because they already have huge pent up demand in form of underserved domestic consumer base.

Third, BRIC have undergone structural reforms in shadow of boom period by freeing sectors from government control, cutting administered prices etc, so the current slowdown is mainly because of the afterglow of these attempts and global slump conditions.

The only declaration that can be made about them is that they may not have the happy time in form of problem of riches in near future , but their inner capability and strength remains unchallenged.

Thank god we are poor

                                              

India is a country where most of the people live life below the decent standards , and the is standard not European but very much modest Indian one, people of 1.3 billion scale produce 1.8 trillion dollars of income annually that on an average comes around 1500 dollars for average person in a year not even 6000 rs per month, and if you see the inequality you will have a different picture altogether , if artificial richness is imposed on the  people by way of mindless transfer payments that do not add any capacity building in the economy then results would we disastrous, take for the example case of stampede at Allahabad junction where score of people were killed, the reason, mammoth crowed that could not be managed by any means of transportation, the rails are overflowing and thank god no railways casualties are reported.

The simple point I want to bring home is that because of our poverty the mammoth population do not put pressure on the infrastructure to its proportionate scale otherwise it could have been complete chaos given the present state of infrastructure in our country, imagine the power situation! every power transmitters could have failed. What i mean here is not that it’s good that we are poor but rather somehow it is manageable for the economy that people are poor, the richness of Greeks broken their economy because Greek could not match the aspiration of its people.

It is very important that country grow riches before its people become rich and not vice versa so that it can meet the aspirations of people, i am afraid had it not been so, policy makers and administration would have hard time managing economic riots, due to low economic conditions virtually there is low aspiration level and low demand and that to mind biggest reason binding India together, differences are more on other lines than this crucial line.

There is always delicate balance between richness of people and economy and that must not be broken, pathetic poverty is unpardonable but stinky richness without proportion is also risky.