The August Pragati

Have you picked up the August 2009 issue of Pragati yet?  It is good. The focus this time is on legal and regulatory reform and it has been guest-edited by Shruti Rajagopalan.  My favourites are this piece by Ajay Shah about the changes in legal regime required for  further Financial Reform, Aadisht’s article on the widespread prevalence of retail corruption in India, and Jaivir Singh’s article on Labour Laws and Special Economic Zones.

A little more about that last piece. The common wisdom is that we need to reform our labour laws to make life easier for our companies. The theory is that if employers know that they can lay off workers without getting mired in red tape, they will be more willing to hire workers.  Now, many people argue that labour inflexibility is not actually much of a burden on employers and that they get around restrictions by hiring contract labour or by “persuading” labour inspectors to be more flexible.

Labour laws do hamper employers when the workers have lots of market power anyway and there are strong unions, as was the case in the Bombay of the 60s and 70s, but when companies set up textile mills in remote areas of Tamil Nadu and Gujarat where employment is scarce and the low wages they offer are still better than the alternatives, they are pretty much useless. In other words, labour laws are ineffective precisely where they could be of use to Labour.

Jaivir Singh points out that instead of changing the law to provide a little more flexibility to employers, opposition to the relaxation   has forced government to adopt a subterfuge wherein they are ignored almost entirely within SEZs. Incidentally, Aadisht’s article is also about why India’s preferred mode of corruption is one where industries buy lax enforcement of the law, rather than lobbying to have laws changed.

The Politics of Reservations

In the  July 2009 Pragati, you can find my article on the politics of reservations.
Whenever supporters of reservations have to make the case for extending reservations for another 10 years, they are faced with a dilemma. If they admit that reservations have achieved their goal, then why do they want them extended? And if they admit that they have not achieved their goal, then why are they persisting with a failed policy for over 60 years? The generally accepted solution to this is to claim that reservations have had some effect, and the policy would be even more effective if it had been properly implemented, and for that they need to extend reservations in time and scope.  This is what I meant when I compared reservations to Yossarian’s liver in Catch-22 – if doctors can confirm that it is a disease, they would have to treat it. If they pronounce him cured, they would have to discharge him. Because the problem was invariably in between, Yossarian could stay indefinitely in hospital.

Here, I would like to respond to some points that were made by Anubhav Agarwal, who made these points as twitter replies. The points here have been edited for readability:
Continue reading

The Hackneyed Man From the Past

Gaurav non-Sabnis thinks that  the use of the man-from-the-past technique in my Pragati editorial “The Case for Freedom” was hackneyed.  He is free to think so. He also thinks that my introduction was inaccurate. He is free to think so too as long as he doesn’t mind being mistaken.

Gaurav makes two errors – a misinterpretation and a factual error. The misinterpretation is this: He says that “mismatch between supply and demand must be as old as beginning of trade”. Well, duh. Obviously, a famine is a severe mismatch between the demand for food and the supply of food. If I had said that there is now a greater mismatch than before, it would have been an extremely stupid statement.

Continue reading

Pragati Marches On

The 24th issue of Pragati is out. If you haven’t picked it up already, please do so.  The theme this time is India’s engagement with the world. On that note there are articles on trade with ASEAN and South America, India’s relations with Bangladesh and on the importance of logistics. Rohit Pradhan and Harsh Gupta weigh in on the importance of the rule of law, and Prof R Vaidyanathan writes about the unique corporate governance challenges for India. Also, as I mentioned earlier, I have written the opening editorial on why Pragati will continue to champion economic freedom.

And, yes, I am running out of puns to use while announcing Pragati issues, and I am repeating them. I just hope that some day, there will be an issue of Pragati on religious tourism to India and I can use the headline “Pilgrims’ Pragati”

Pragati Alert

I have written the opening editorial for the March 2009 issue of Pragati. It should be out any time now.  This is how it starts:

A visitor from the 17th century would be rather surprised to learn that the United States of America of 2009 is in distress. He would of course be no stranger to troubled times, but in his time, troubles came in the form of famines, diseases, strife and taxes. This blight called “recession” that has struck the United States would seem strange to him. Factories that were at full steam two years back are now idle, though their productive capacity is undiminished. Healthy men and women who were working in those factories now sit at home. Goods lie in warehouses even while vehicles to transport them in and roads to carry them on remain intact.  Further inquiry by our visitor would reveal that the cause of the United States’ trouble is a breakdown in the system by which it co-ordinates demand and supply, present and future consumption, and risk and reward. The visitor would not be prepared for the scale and sophistication of the system that has now suffered a setback, but he would be no stranger to the idea of markets. Markets and traders have existed for as long as humankind has, and so have attacks against them.

Read the rest when you get the issue in your mailbox

The Model of Law Enforcement

It so happens that  my article in Pragati is around 200 words shorter than it should have been, because it was supposed to be one of a set of 2, and had a reduced word limit than the normal Pragati article. Neither Nitin nor I are very strict about word counts while editing. If an article is well-written, we don’t care if it goes a couple of hundred words over. But while writing I am very very conscious about word limits. I set a target, constantly check my pace, and almost always ensure that I make the limit.  When it became clear that Karthik’s article was not going to arrive, I was thinking of revising my article a bit, but then I had to rush to the hospital. So if I had given myself another 200 words, I would have been able to cover some of points I am covering now.

Continue reading

Me in Pragati

I have an article up in the October 2008 issue of Pragati. There I argue against Karthik’s post on statistics and terrorism. I argue that if we give a “free hand” to our police to fight terrorism without insisting that they obtain convictions from courts, we will not only end up with too many innocent victims, but also too few genuine terrorists. This was supposed to run in a debate format, with an article from Karthik and a response from me, but Karthik asked for a bailout at the last minute, which left only my article standing.

Pragati in June

The June 2008 edition of Pragati is out and I shamefully realise that in the last two months I have announced the publication of Pragati without making an atrocious pun. How could I have not made a pun in May? Anyway,  please grab your copy of the June Pragati before it becomes Juna.

All the articles are awesomely good this time, even though one of them has been written by Aadisht. I will never forgive him for sending an article on the importance of Financial Sector Reform that was double the nominal word limit. I deserve a medal for cutting it down to its current size, so don’t make my effort go waste. Go read it.  It explains the Percy Mistry and the Rajan committee reports very well. More importantly, he explains very lucidly why financial reform is important if we wish to reduce inequality and enable inclusive growth.

Urban Predictions

 “…the impact of this [delimitation] commission on India’s politics  will be at least as far reaching as that of the Mandal commission.”  

Now that we have seen the impact of the delimitation and increased representation for urban areas in the Karnataka election results, there will be increased talk of this phenomenon, but I just want to place on record that I had talked of this back in January 2008. I am not sure if I was the first one to talk of this, but just in case I was, let the date be noted.

I must also point out that I am not sure what the impact will be.  I have been speculating quite a bit and much of the speculation will prove to be wrong. I am more likely to be correct about generalities (“national parties will benefit”) than about the particulars (“BJP will benefit”). My reasoning is more likely to be correct than the conclusions, because a small error in reasoning is likely to result in large errors in conclusions.  But I am most confident about the statement made above – i.e. in time, the impact of urbanization on India’s politics will be as large, if not larger than the impact due to the Mandal politics introduced by V P Singh.

Pragati on Liberal Nationalism

The May 2008 issue of Pragati is out. The focus this time is on liberal nationalism. I have an article claiming that liberals tend to ignore the need for nationalism and a need for a cultural shift before India can accept liberalism. Gautam Bastian writes of the conflict between liberal and nationalist ideals, and Raj Cherubal believes that a secular-right victory can occur through tactical alliances with the secular left. I disagree with the last view, and my view is somewhat at variance with Gautam’s so it was an interesting experience to edit the articles without injecting my own views.

The other articles are excellent too. I particularly recommend the interview with K Subrahmanyam.

The 13th Pragati

It has been exactly a year since Pragati was launched, an event that Nitin has strangely not remarked upon. The April 2008 issue of Pragati is out, and. It focuses on the budget, and as usual contains many excellent articles. I particularly like the one on the Debt Waiver by Salil Tripathi.  There is no article by me this time, but Nitin has kicked me upstairs to make me an editor, along with him. Editing was a much scarier experience than writing, so let me know how it turned out.