Tuesday, March 25, 2014

Settling the cause of India's Pearl Harbor (1962 Indo-China War)

No other dispute in the world is as long, more complex and more controversial than that of the India-China border. The 1962 Indo China war was fought in the age of pre-internet, pre-social media, and pre-television. Radio and newspapers were the only source of information. Recently, some of the pages of the inquiry committee report of the war were leaked out. Post this leakage it's high time for settling the cause and many blunders committed during and before the war that continues to impact our diplomatic and political relationship with China till date. There has never been a public debate going into the cause, effects and solution to the problem.

China has always had expansionist mindset and it has exhibited this over centuries and more so in the early 1940 and 1950's. It is Nehru who never understood this despite many of his ministers, particularly, Sardar Patel warning him several times. I had explained the cause and solution of the border dispute clearly in two part series on my own blog 5 years ago.

The two articles above are very lengthy and I did a great deal of research to get into the root cause and find out who is right - India or China over its claims. If one gets scared at the sheer length of the article here's the conclusion. My conclusion below may provoke you to read the above articles again and again.

Solution to the Aksai Chin area: Split the Aksai Chin area into 2 parts and let India and China have it equally. This is because Aksai Chin belongs to no one based on historical records and currently this area is with China. China will not cede it and India won't give up its claim on the entire area.

Solution to Arunachal Pradesh Region: The whole area of Arunachal Pradesh except TAWANG region belongs to India. Currently, India has TAWANG that belongs to China. India won't give up and China won't stop pursuing it.

The 1962 war was the most humiliating war India ever faced and fought. India lost so badly that it took years to recover the army's morale. The war saw a patriotic wave across the country to an extent never seen before. Everyone was scared that China might penetrate deep into the Indian territory. Till date no government has ever made an attempt to declassify the exact cause of the war and the only inquiry committee report (Henderson-Bhagat report) has never been made public. The report doesn't go into explaining why the dispute started, why Tibet's voice was not even heard by China and why Tibet's annexation was unacceptable to India since it was military inquiry report. According to sources in the Indian Defense Ministry there were 3 copies of this report - two with the Government and third with Neville.  

Neville Maxwell, the journalist at that time had access to a copy of this document which he used as a basis of his book India's China war (Source). Neville's book according to several readers is more an explanation or analysis of the report and not the actual report. The book does go into the origins of the conflict. The book for the first time pin pointed Nehru for many misadventures. The problem with the book though is that it is pro-China in many ways and anti-India. One cannot take this source as an unbiased account. 

The actual report's pages were made available on Neveille Maxwell website and then several magazines such as Outlook magazine added them on Mar 18th 2014.(Source). Although the book has been in publication for quite sometime now, the report itself was made public on his website http://www.nevillemaxwell.com/ (no longer available now). 

There are parts of this report which are truly chilling and nerve raising. In the below paragraphs I have made an attempt to explain this in a brief, but clear cut manner. The report has 3 volumes and only the first volume has been leaked. Some pages of the report have been deliberately deleted. We don't know how many more generations or decades it would take to know this complete report. However, the first volume itself speaks volumes about the military blunders that continue to haunt India. 

Lt. General Henderson and Bhagat in 1962 wrote the inquiry report that went into the details of how India lost the war and what political and military decisions were taken during and before the war. 

Henderson-Bhagat Report squarely blames India for the war and puts the onus on Indian political and military leadership. The report clearly blames "Forward Policy" in Nov 1961 (the actual war started on Oct 20th 1962 and ended in a month) when it was set in motion by Nehru. The policy, according to the report, provoked Chinese to attack in a full blown scale. This policy's aim was to put troops on the border who could go deep into the areas bordering China so that Chinese will not think of claiming any territory of India as theirs. The assumption to go into this adventure was that Chinese will not retaliate and that we are capable of fighting the Chinese. 

Image courtesy: (Link)

The report highlights on military failures more than lack of political sagacity. Based on CIA report (source)we know that both Nehru and Defence Minister V.K. Menon never agreed with the estimates given by the military General B.M. Kaul and Intelligence Bureau Chief Mullick who asserted that Indian military was better prepared to deal both in the Eastern and Northern sectors. V.K. Menon blindly trusted the military and then blinded Nehru into going forward with sending troops to the border. The war significantly highlights one thing - A country's head like that of India's must not depend upon one source to take decisions in matters of defense and border disputes.

The report (Source) also explains how Lt.Gen Kaul had deep political influences and scarce regard to military hierarchy and neglect of assessing the real lack of preparation. His election itself as the Military Head of the operations in the North East was politically motivated since he was a distant relative of the then Prime Minister Nehru. He was a failure in several operations before this and yet he was appointed for the operations of the North East. North East was more difficult to fight (mainly because of temperature and terrain) and required at least 12,000 troops more than the force in Ladakh and required air force deployment. It could be one of these reasons that the Govt may have been hiding the report since it can hit the morale of the Indian Army and also the fact that Kaul was appointed because of Nehru's influence would be brought to the forefront. However, fact is a fact and hard truth cannot be hidden just because it is harsh.


Indian Army was not prepared for high altitude battle. It was used to fight on the plains with Pakistan. Lack of equipment and training to fight Chinese soldiers caused India dearly.

It was China that backtracked from its position in Arunachal Pradesh otherwise it would have conquered both north and eastern parts of India. We have to thank China for both destroying and saving the day. Their attack destroyed India and their withdrawal saved India. If that was not the case West Bengal would have been part of China since the attack could have spread so deep into the heart of India.

(Image courtesy: Hindustan Times, Calibre)

If anyone is interested in reading this report or Claude Arpi's (French journalist living in India and is considered one of the experts in Indo-Tibet-China issues) interpretation of Neville's book it is here or even Arun Shouries' book - Self Deception: India's China policies

My own take is that following political and diplomatic blunders Nehru committed with regards to China: 
  • He refused formally to discuss border issues with China despite having the opportunity several times between 1950-1954, especially after China conquered Tibet. Even when China did not respond to his oral announcement in Indian Parliament he took their silence as admission of border India claimed. Never until 1958 did it occur to Nehru that a country that is in the process of formalizing its borders (post independence) get written confirmations from China. Long before his formal letter to China time he had asked formal maps to be published indicating the Mc Mohan line and Aksai Chin part of India. As a reply to 1958 letter, Chinese rejected Mc.Mohan Line.
  • Sending Indian officials in Tawang and allow them to take care of the affairs was wrong as it was part of China.
  • The biggest opportunity was when India and China signed Panchsheel agreement and Nehru accepting claims of China over Tibet. When this was accepted all the boundary agreements that Tibet signed also was indirectly accepted by India. It was a golden opportunity to settle all border issues at that time. Had they been settled we would not have reached the position we are in right now.
  • Nehru must have given up Aksai Chin in lieu of China giving up its claims on Arunachal (Source) right in the initial stages.
  • When Nehru accepted Tibet as part of China there was no need to welcome Dalai Lama. The smart move would have been to leave the matter to China. If Nehru had not accepted so then giving refuge to Dalai Lama was not a mistake at all.
  • Blindly trusting his defense minister V.K. Menon's assessment of things without having a sharp understanding of the ground reality.
  • Ignoring Sardar Patel's written letter to be cautious of China when it invaded Tibet and reassess border posts and military strengths. (The letter is published in Makers of India's Foriegn Policy: From RajaRamMohan Roy to Yashant Sinha by J.N. Dikshit)
  • Nehru supporting for UN seat For China amidst all this.

Relying on multiple sources of information coupled with sharp understanding of the enemy is a must. Indira Gandhi and Vajpayee had both these qualities and they exhibited them in 1971 and 1999 wars with Pakistan respectively. While Indira used all the might to defeat Pakistan with a great sense of smart thinking, Vajpayee used might and diplomacy to bring Pakistan to its knees. These two wars were examples of exemplary leadership by and far, despite flaws in the operations of the two wars. Nehru lacked what both these leaders exhibited. The underestimation and overconfidence led to the most expensive and humiliating war at the hands of China.

This war has taught one lesson in matters of geographic neighbors. Never underestimate the country whom you consider as a threat, never provoke it until you are prepared with the onslaught and have a firm written document as evidence in any matters, specifically related to borders and defense.  If Nehru exhibited all these 3 qualities he would have never led India on this dangerous path.

Nehru's blunder is so deep and profound that over the years it has made it harder for any party that rules India to go back on what Nehru accepted as the true borders It is politically suicidal for any party to give away any Aksai Chin.

It's high time this issue is laid to rest and the public debate and awareness created so that everyone is aware of the geo-political reality of 1962 and its effect on the coming generations. Let's hope whoever forms the next government in May 2014 gets a chance to settle this piece of history.

Some of the good articles in this matter can also be read here:

Monday, February 10, 2014

Theatrics and Reality of AAP Government

For millions of people when Arvind Kejriwal was elected as Delhi CM represented a strong beacon of a healthy change in Indian political system. This was because there is no political party left in India today that can claim to be corrupt free. AAP occupied the space of a corrupt free one. The expectations just sky reached because it was expected that AAP would do something that was least expected and far more unique when compared to all other political parties. The media still continues 24*7 coverage of AAP policies, behavior and perspectives and it really has become the watch dog more than any AAM ADMI in Delhi. If the media was really active during the pre-2000 era all negative shades of both BJP and Congress would have been exposed. The truth of secualrism v/s communalism, truth about every policy move BJP/Congress took when they were in power would have come to the forefront long before. 

Whether you call it bad timing or not the Lok Sabha elections appears to be a huge opportunity for this new party and so the entire strength and force is currently being put behind winning maximum seats in Lok Sabha rather than proving themselves through governing Delhi. This dream of occupying the role of a spoiler to both Congress and BJP seems to be very much in the mind of every AAP member. Nothing wrong with it, although it is detrimental to 2014 elections since a majority to any party is far better than a hung parliament.

Let's see through an objective prism as to how this party has fared and if the party really gives that hope for which it stood in the election and won. Delhi is probably one of those cities in India where corruption has penetrated every aspect of life and touches everyone. It is also one of its kind cities in India where there is no respect for breaking any law and no fear of accountability. These attitudes plague every city in India but strongly so in Delhi. This is the precise wavelength with which Kejriwal's agenda resonated Delhite's hearts. He transferred corrupt officials of the Delhi Jal Board and put in new officials. He also ordered an audit into prices of power companies so as to look into spike in electricity bills. He started a unique helpline that guides people to expose corrupt officials and make them available to the whole world. He ensured a fear is created amongst officials from taking a bribe. These things are welcome but not adequate to confirm the party's stand on several issues. The fact that AAP is planning to start SIT (Special Investigation Team) to probe into 1984 riots is a huge welcome move.

Why is his party or government not thinking of policies that can increase power generation? Why isn't his government executing an action plan to ensure there is good supply of water to peripheral areas of Delhi? Why is the government not executing any steps to cleanse the city of illegal colonies, unauthorized constructions? All these are the foundations of clean governance. Corruption must be tackled simultaneously, but complete effort should not be directed in this direction.

Women's safety of which the party made a big issue and promised women police officers patrolling the streets of Delhi is no where seem to be fulfilled. Recently rape cases that happened under his vigil highlight the pathetic betrayal of promises that the party made. The party is no different than other parties when it comes to taking populist measures such as subsidized water, or electricity. All parties give freebies, subsidized rate utility supplies, etc. How is it different from other parties? Why should a party depend upon freebies when the supply of utilities itself is incomplete and inadequate? 

One cannot dismiss and ignore the way in which the party sabotaged the city for just transferring 4 police officers who did not take action against the African women in Malviya Nagar. No matter how bad the crime the Law Minister of a government cannot take law into his hands and do what Mr. Bharti did. The internet is flooded with videos, transcripts, CCTv surveillance recordings, pictures etc that clearly prove how Mr.Bharti behaved pretty much like Ram Sene or other organizations that claim to be cultural guardians of the society. Such racist remarks and untenable behavior is a great blot on the party. Adding to the fire is the statement by Kejriwal that nothing was wrong in what Mr. Bharti did. There can be no explanation or excuse that can be given to such misdemeanor in public discourse. The members of the party seem to be overly aggressive in tone and tenor. It is just sufficient to see what opinions the members carry. As an example the party's Kumar Vishwas makes racist comments against Kerala women, backtracks on statements in Amethi, Prashant Bhushan's unacceptable statements about Kashmir and several others raise great doubts about the trust one can have on this party. If the party doesn't have patience and perseverance it cannot sustain itself.

The entire episode in which Mr.Kejriwal hijacked the rehearsals just before Republic Day celebrations demonstrated one thing. That the party can resort to one old, granted and a given technique of Dharna and Satyagraha. They are now elected representatives and not street protestors. If people have given them chance to rule they cannot transition themselves onto them. There are negotiations, diplomatic ways and peaceful talks that they can resort to find ways to solve a problem.

Some of the more symbolic gestures make no difference to me. As an example giving up VIP culture or making laws and government work on the streets. They don't add any value to me. What adds value is what difference you make whether you run the government in the four corridors or outside. What does AAP want to prove by making legislations in the open? Kejriwal could have asked live telecast of proceedings in Delhi Assembly. The Parliament proceedings are anyways broadcasted live. There are several interesting, mind boggling, thought provoking discussions that happen in Parliament. These proceedings over a period of time have number of times shown how each MP behaves and how unruly each MP can become. There is no need to bring that drama to the streets. Such gestures, according to me, are useless symbols of showing that you are different.

AAP must remember they can't change a system that has been running for 65 years, although they can change the flow of governance in the systems which is what efficient administrators do.They can't brandish the very system of which they are part as evil and do nothing about it.  There are several ways of using technology to fix issues that affect the common man on a daily basis.

The party which wants to appeal to the people to not to vote for Congress or BJP should have clear articulated visions of foreign policy and economics. Both of which are absent. They don't even have a team that can guide them about these matters. Imagine if the party doesn't have patience to deal with country's neighbors and other countries of the world. Aggression and impatience doesn't work in international diplomacy. We live in truly complicated globalized world that requires immense planning and strategy to tackle them. Just by concentrating on corruption no party can give governance. At a national level AAP is truly unprepared and amateurish. No matter how much we criticize, love or hate Congress and BJP - it is only these parties that have the complete expertise to deal with complex geopolitical realities and adapt policies that suit such circumstances.

The party simply cannot have a pan India appeal until it proves its worthy of it. Simply by adding Sonia Gandhi, Modi, and others to corrupt party list and then propagating it won't fetch any votes. It is important that AAP proves itself in Delhi before dreaming big. 

Further, AAP claims it has more members than it can finalize for contesting 350 Lok Sabha seats. It is not a cakewalk. Many parts of India are choosy at a national level to elect a new party.

Two months is still a small time for a new party to be judged, but absence of patience and maturity will not win them any seats outside National Capital Region and it is a reality that AAP must accept and mend its ways. Ruling Delhi and ruling India are totally different worlds. AAP must set its eyes completely on Delhi.

Reforming political system requires institutional changes and not aggressive posturing. Aggressive posturing works as long as the person leading it is in command. Once the person leaves everything is back to square one. An institutional change on the other is more effective and tends to be permanent.

Sunday, January 12, 2014

New Mumbai Airport T2

There is hardly anyone who has not complained about the mess of the existing Mumbai airport. Personally, when I had to arrive into the international airport and depart from it made me feel it is a bus stand with a total pathetic look of the airport. I had decided I will never land in Mumbai airport the next time. Those days are just over. A few days ago the new MUMBAI AIRPORT T2 was inaugurated. The size is so huge that 27 football fields can fit into this one 4 storey  building. T2 is the new international terminal and within a year will be an integrated terminal with most of the domestic flights also operating from here.

T2 is definitely larger in size and handling capacity compared to Heathrow Terminal (T5 in London) and Changi's international terminals (T3 in Singapore) while smaller compared to Hyderabad or Delhi's T3.

Number of check-in counters: 188
Number of immigration counters (departure and arrival): 140
Number of customs counters: 10
Number of baggage claim carousels: 10 (too less for this airport !!)
Number of bathrooms: 101
Number of elevators: 73
Number of escalators: 47
Number of moving sidewalks: 41
Number of security check positions: 124

There is a 3 km stretch which is the main highlight of the airport with major artifacts, real exhibits from all parts of India including the famous architecture of Belur, Halebid, wooden paintings of Jaipur and Gujarat,  cave paintings and frescoes of Ajanta and Ellora that culminate a museum inside the airport. Nothing may be more appropriate for visitors and foreigners to get a glimpse of Indian history from across the 4 corners of it in one single place. This is spread across the international terminal and is accessible only for international arrival and departure passengers while passengers walk to/from their boarding gates.

The sad thing would be for those visitors who would appreciate this huge Indian architecture and then all of a sudden see the same old traffic and chaos on Mumbai's streets once they come out for India's cities really lack uniformity in planning -  a fact that everyone knows.

When I looked at the video posted on NDTV for the first time it was more than breathtaking. Apart from the usual airport infrastructure, the whole art murals, art exhibits that adorn the airport make it aesthetically one of the best buildings in modern India. 

While Delhi's T3 does display some of India's art, 
Mumbai takes a leap ahead. 

The main motif of the airport is white peacock and the top part of the pillars project a peacock feather like appearance with white color. There is abundant sunlight that will flow into the airport through small openings and this reflects the white peacock on the floor (nice creativity). This also reduces the power consumption during day light since there is enough light to flow in.

So, even if one's flights get delayed there is so much to see and admire that the wait time may not be that bad at all. It is a classic blend of ancient Indian richness in a modern contemporary building.
There are lot of paintings reflecting famous bollywood actors showcasing Mumbai as Film Hub

The operational efficiency of the airport and the way it is maintained can be judged only with time, but given the private hands I hope there won't be any major complaints. For now the airport will handle only international flights and slowly it will bring all domestic departures/arrivals onto this airport. Hope the transition is smooth, fast and efficient otherwise it will make it extremely inconvenient for passengers.

The parking capacity is 5200 cars which may still be less compared to the huge traffic the airport must handle. There is a dedicated 6 lane expressway to connect to the new airport which is good.
(All Pics Courtesy Skyscrapercity.)

One of the things that has been considered is the travelling distance between the actual departure point and entry point. It is relatively less compared to the Delhi's T3 which has been a pretty frequent complaint. 

Note: Only by 2015 both the domestic and international will be handled in this same new building. 

One of the things the UPA government has achieved in infrastructure is the overall revamp of airports in all major and second tier cities. I still wait for the day when our railways and railway stations will see such a huge push for revamp.

Tuesday, December 10, 2013

Assembly elections analysis and dramatic debacle of Congress

Congress's depth of defeat in the Hindi heartland cannot be measured in numbers anymore. They have been rejected so badly that it would take years for it to recover. Forget decent defeat this was a decimation. Congress continuous effort to make India a welfarist state where tax payer's money would be given to poor people and convert India into even more corrupt system without altering the existing delivery system of governance has made them an entity to hate by large sections of the country. The misgovernance and increasing inflation has caused widespread anger.


Ending up with 8 out of 70 in Delhi is the worst ever performance. This is worse than Congress's lowest tally so far of 10 in 1978 (post Emergency). A huge variety of factors worked against the Congress - corruption, the way Commonwealth Games were conducted after loot of people's money, deteriorating law and order, rising prices, the inhumane way of treating Anna Hazare and his movement supporters and so forth. Delhi was the safest bet for Congress and a citadel hard to breach with Sheila Dikshit at the helm. Anti-incumbency was not a factor for Sheila as much as Congress wants to portray it.

The rise of AAP is a big shocker for the entire political spectrum. With Omar tweeting that low turn out of crowd is a big problem he was signalling that absence of people at Rahul's rally was a disaster waiting to happen. AAP which captured voter's imagination by raising issues that genuinely affect common man, by writing a manifesto with direct inputs from voters, reaching out to peripheral areas of Delhi which had never received any benefits from either BJP or Congress - were all honest efforts by a new political party to reach out to voters.

Sheila had taken Delhi for granted and the people saw in AAP a genuine alternative to both Congress and BJP. Many people were confused whether to vote for AAP or BJP (since a new clean face Harshavarhdan of BJP personally selected by Modi himself was the CM candidate). Had BJP not changed their leader in the nth moment AAP would have stormed to power with a clear majority. The real hero is AAP and its leaders. They defeated so many Congress and BJP leaders and Arvind defeated Sheila - a moment remembered in history. One could not have imagined that Arvind could defeat Sheila in this manner. He even refused to contest from any other seat and was so convinced to face Sheila and wanted to stand anywhere Sheila stood. 

Role of Modi Factor: Yes, since a clean image of Harshavardhan got BJP the chance of being the single largest party.


No where can Congress's rout be felt as much as Rajasthan (after Delhi). A mere 21/199 seats and BJP getting 80% of seats - 162/199 is a remarkable first time feat for both BJP and Rajasthan's political history.
This is worse than BJP's lowest tally so far of 32. Vasundhara Raje campaigned too hard in the state. Rajasthan somehow votes very decisively each time. It looks like the entire state votes in the same manner. No state probably can match this sort of behavior every 5 years. Gehlot government had been so much inactive that the people were very much against it. Besides, Congress pushed all its central government schemes in Rajasthan to be used as a test lab to be replicated across India and that too in the final year. It failed so miserably that it even backfired. 

Role of Modi factor: DEFINITELY YES. Since the surge of BJP could not have been because of Vasundhara alone. She herself expected close to 120 seats. This additional 42 seats is definitely because of how Modi campaigned in Rajasthan. He truly capitalized Congress's non-performance.

Madhya Pradesh:

Madhya Pradesh genuinely saw real development work in the last 6-8 years. Roads, electricity and women's welfare schemes were a huge hit. Several of my friends repeatedly told me Shivraj Singh Chauhan did impressive work in rural parts of the state and life improved under his leadership. By all its standards BJP did its best performance here since winning 3rd time with this sort of majority is no less achievement. 165/230 which is 22 seats more than in 2009.

Shivraj did what Modi could not do. He increased his victory margin the third time by a whopping 22 seats. Modi in his 3rd time victory managed to get almost the same number of seats as his last time.

Role of Modi factor: Only the SURGE since Shivraj's own charisma was much more than Modi's presence.


Dr. Raman Singh of BJP was known for improvising the PDS scheme by which nearly a corrupt free system of transfer of food subsidies was operating. Further, Raman Singh had a tough opponent - Ajit Jogi. Last year when close to 50 Congress leaders were massacred by Naxals it was expected that Congress will ride on sympathy wave. The race between the two was so intense that till the last moment the seats were shifting in both BJP and Congress's favor. Finally, a 10 seat gap made BJP get 49 and Congress 39.

Role of Modi: Not Heavy, but the game tilting in BJP's favor was purely because of Modi's aggressive campaign.

What does this mean for Modi and BJP?

Modi wave cannot be discounted at all. However, Modi's success now hinges on how he can capitalize this Anti-Congress momentum in South and Eastern parts of India where BJP doesn't get good seat count. It is important that Modi makes his presence felt more than ever before in these regions and more so in UP. It is completely MODI and only MODI who can deliver now the drastic increase in BJP's tally. It is time for more smart strategy at work for Modi.

What does this mean for AAP?

AAP is truly the hero of this elections. However, a movement that converted itself into party would take time to make their presence felt in elections at the national level. They can increase their presence in several urban constituencies but can't really dent both BJP and Congress at least in the upcoming Lok Sabha elections. You can win votes by showing your anger at the present government but unless they can prove in Delhi by being in government they can't convince voters throughout India. AAP's economic policies are like Congress where there is too much subsidy and freebies. We don't even know what their foreign policy is, how they plan to modify Tax code, how they plan to revive economy, how they can tackle China, how they can increase manufacturing etc. These issues are not easy to tackle just by getting clean and honest people. Right now the best answers to these questions lie only with BJP and Congress because of huge administrative experience in states and the Center. Here is my observation. To prove your mettle you need not be in power, but ruling the country is a whole new game that requires a different vision and perspective. Why is Modi acceptable to a large people? He has a proven track record of excellent governance unlike Rahul. He is making every effort to make himself acceptable to all sections of society.

The best way is to support either BJP or Congress in Delhi and get their Lok pal version passed. If they do so and then withdraw support at least they will prove to be serious contenders to both Congress and BJP. Also, they can offer issue based support just like Mr.Prashant Bhushan of AAP suggested so that way they can withdraw support if either of the 2 parties play tricks.

In other words AAP cannot emerge so strong so as to challenge BJP and Congress right away in this Lok Sabha, but given time they can definitely do so. 

What does this mean for Congress?

There is nothing to say except that things will get worse for Congress in 2014. But Congress is too smart to be ignored. You never know at the last moment what political strategy Congress may employ. It can say it won't declare Rahul Gandhi as PM. This is the best strategy since Sonia Gandhi would shield her son's career by not staking it in a fight against Modi. Secondly, Sonia Gandhi may prefer PM Singh to continue or ask Chidambaram to be the PM face.

Congress may resolve to more freebies and their famous "farmer loan waiver" may be triggered adding a fresh burden on the economy. Their attempt would be to woo the farmers or a massive reservation attempt for Muslims to win over their votes. Any resort to populist votes can be a double edged sword to the party.

The country cannot let itself go bankrupt by involving in these welfarist policies. Sonia Gandhi's National Advisory Council (NAC) must be thrashed out immediately for it is the main entity Sonia is relying on for coming up with such schemes. A young aspiring India is not at all a concern for the Congress.

Unless Congress reforms and comes up with a good vision they will fail to win the hearts of the people. And definitely, as its party member Mani Aiyar put it - "Who can be even half-way realistic and expect the Congress to return to power?" 

Saturday, November 16, 2013

Gurgaon Rapid Metro: The first private Metro system opened for operations

Gurgaon has emerged as the city with the third highest per capita income in India. 50% of Fortune 500 companies have their presence here. It is the hub of software outsourcing in India. It is also home to several banks and financial institutions. The city is expanding and yet inadequate infrastructure facilities and rising crimes against women are becoming pressing concerns for the city. Like Delhi, Gurgaon has been craving for Metro Systems ever since Delhi started expanding in several directions.

Gurgaon has now become the only Indian city to have 2 different metro systems. No other city can probably see 2 metro systems in future considering the slow pace of metro construction in Jaipur, Bangalore, Mumbai, Chennai, Kochi and others. Delhi Metro's YELLOW LINE (Jahangipuri to HUDA city) was the first line to go outside Delhi and reach Haryana. Sikandarpur is the second station one reaches while boarding the Yellow Line Metro and crossing Delhi border into Haryana. Currently, yellow line has 5 stops in GURGAON - Guru Dronaacharya, Sikandarpur, M.G. Road, IFFCO Chowk and HUDA city center.

The Congress led Haryana Government wanted HUDA (Haryana Urban Development Authority) to do the construction and operation and issued tenders. Delhi Lease and Finance (DLF) emerged as the only bidder and wanted to provide the construction, operation and connectivity. DLF came into an agreement with HUDA that it will pay connectivity charges and some percentage of ad revenue to it in lieu of complete self funding and operation. 
This project called RAPID METRO started in Aug 2009 and was intended to be complete in 30 months. A delay of 10 months did happen and then Rapid Metro was opened on 14th Nov 2013.

This is the first time such an agreement led to Metro construction in the country at such a quick pace justifying the name "RAPID METRO".

Unlike Delhi Metro that is patrolled by CISF Forces, Gurgaon Metro will be patrolled by private security. Only time will tell if these security set ups work efficiently or not. Huge presence of CCTV is a big plus and is becoming a norm for most new infrastructure projects these days. The trains will operate from 6:05 am -12:20 am with a frequency of 3 minutes.

Some of the salient features are presented in the image below (Courtesy: Skyscrapercity, Google)

 Phase - II will be finished by 2015 and will have 6 stations.

Why is that the speed of average Metro train is 30 km/hr when the speed can be reached to 80 km/hr? This speed must be eventually increased considering the increase in usage. Train systems operating at this speed is too slow and modern systems that have the ability to reach 80 km/hr must at least maintain 60 km/hr

It would rather surprise commuters of Delhi Metro as to how this train doesn't have reserved seats for women and senior citizens. Rapid Metro perhaps must learn from Delhi Metro regarding this. The number of coaches are just 3 with a 1000 passenger capacity. This is too less considering a huge workforce which plans to use this to commute to their workplaces. Eventually, I am sure they will increase the number of coaches based on Delhi metro experience.

While Delhi Metro has maintained all its stations fairly clean despite 12 years of its operation, one needs to wait and watch to see how this privately operated Rapid Metro does. As of now, Phase- 1 is just 6.1 km long and phase-2 is underway.

Another very interesting feature is that Delhi Metro and Rapid Metro have integrated in the way the smart cards are accepted. This is very convenient and well planned out strategy otherwise passengers would have had to get separate tokens and cards to cross the 2 systems. Like many tracks of Delhi Metro this one too draws power from a third rail.

The official website of the Rapid Metro is http://www.rapidmetrogurgaon.com/Default.aspx

The biggest lesson that comes out of this project really is the fast pace of execution. In 30 months this project was completed and when one looks at Mumbai it looks like Metro will not even be completed in another 30 years. Mumbai, which is much bigger than Gurgaon badly needs faster execution of Metro system and so is Bangalore. While Bangalore's progress is way better than that of Mumbai, Gurgaon's Rapid Metro business and execution model is worth emulating. The majority of the area where this line passes is owned by DLF and so DLF found it very profitable and tied up with Siemens and others (more details here).

If the IT companies in Bangalore took a similar initiative and just connected the Electronic city to major parts of the city it will be a big boost to all employees who commute to that area from other parts of the city. The Bangalore Metro phase - II envisions this but given the retarded pace of Phase - 1 construction it may take several years for this to see the light of the day. Hence, Gurgaon Rapid Metro is worth considering for areas of any major city where business and offices have a big presence.

Tuesday, October 8, 2013

Land Acquisition Bill - Impact on Real Estate and Congress in 2014

Around 3-4 years ago several protests erupted across the country over land acquisition issues. Many highway projects were stalled because of this too. I had highlighted in my article in 2010 (Click here to read) how China passed a major land acquisition bill that kick started their economy since 1998. In fact, there has been no legislation that defined how the land will be acquired and what compensations must be given since 1894 when the British first introduced it. Land was acquired and no fair compensation was given to any land owner. This caused outrage, protests - popular amongst these being Singur protests in Bengal where farmers were killed because they didn't want to give up their land.

Congress worked hard to get a bill because the farmers vote bank was one they couldn't afford to lose. But it kept on delaying this bill until it found an opportunity at the time of elections to get it passed in a hurried manner. Mrs. Sonia Gandhi, I guess took this as a personal project. She somehow asked all her party members to get it passed. Now, the BJP had to support it because it too has farmers vote banks in several states. Even if the BJP had opposed, Congress knew how to get the bill passed (hook or crook). This bill has many good provisions, yet the process to get to these provisions in reality is corruption prone and will only take us back to good old days of government control over everything.

Some salient features of this bill: (Source where numbers are got). MY comments are in Red below
  • 70% of land owners and workers/affected families consent required for public-private projects and 80% in case of private projects.
  • Compensation amount is upto 4 times market price in rural areas and two times in urban.
  • Any land that is very fertile cannot be acquired and must be done as a last resort and states will apply restrictions regarding extent of such an acquisition. If states do want to take this then the state government needs to pay the value of agricultural land upfront (this is excellent since fertile lands should not be used for anything but agriculture)
  • Only if no unused land is available (determined by the Collector) shall a farm land be acquired.(Can't the collector be bribed? If so, what happens). The collector can be fined upto 4 times in case he doesn't update records accurately since the compensation is heavily dependent on this.
  • Any affected family (agricultural labourers, tenants including any form of tenancy, share-croppers or artisans who depend on this land since 3 years prior to acquisition) can accept a) employment which will be in addition to training, and skill development with monetary benefits such as Rs.50,000 transportation expenses and resettlement expenses. b) Or accept Rs.5 lakh one time payment, plus Rs.2000 per month for 20 years with inflation adjustments. c) Affected people will get Rs.3000 per month for 1 year. d) If the affected people include artisans then minimum amount (one time) must be Rs.25,000. (Good provisions! But how will payments be made? Can't it be connected to AADHAR or bank accounts directly? It needs to be else there will be corruption for sure). All this money that the recipient receives is exempt from TAX. (Wow!! That's better)
  • In case of acquisition of land for irrigation or hydel project the rehabilitation and resettlement shall be completed six months prior to submergence of the lands proposed to be so acquired.(Good provision, at least money is given before land is acquired)
  • The Collector shall take possession of land only after ensuring that full payment of compensation as well as rehabilitation and resettlement entitlements are paid or tendered to the entitled persons within a period of three months for the compensation and a period of six months for the monetary part of rehabilitation and resettlement entitlements commencing from the date of the award. However, families will not be displaced from this land till their alternative R&R sites are ready for occupation.(This is even better because land owners may not trust their buyer as seen in several cases).
  • Any land belonging to tribals, SC/ST communities - shall be paid 1/3 of compensation amount upfront and the land must be acquired only after consent of the Gram Sabhas of that region. SC/ST communities do get additional compensation if their land is taken. (Good part is tribals are protected. It is the forced acquisition of tribal lands that has led to Naxal movement in several parts of East India)
  • Social Impact Assessment Reports need to be carried out by government appointed experts with the Panchayat heads and must be discussed with them and Panchayats have the right to reject (good, but overreaching because any deadly nexus between the two could be disastrous on end and on the other hand industrialists will have to wait big time to get their land).
  • Social Impact Assessment Reports must be done within 6 months.
  • State Governments allowed to add more laws to enhance the same. In case the acquired land is not used for the intended purpose then the govt can use it for another purpose or return back to landowners. In case of return it has to be done within 5 years.(Can't it be done faster?)
  • If the State Govt acquires the land and then sells it to a 3rd party for another price, then 40% of the appreciated value needs to be given to landowners.(Good Indeed!!)
Major issues with this bill - 

1)Time and increased costs associated with it and will take India back to pre-liberalization era:
It takes 6 months to do Social Assessment Impact, then another 1 year for further notification and approvals and then so forth. Why should the state sit and do this work? Why would so many layers of bureaucracy come in way to acquire a land? Why can't we have a regulator? At least regulators are better off than state governments and its various committees which will be corrupt and less interested in encouraging projects. The chart below will explain why this bill adds 50 month wait time(chart source: economictimes)

When land acquisition takes this long, it does affect industrialists. They cannot infinitely wait to start a business. This bill is heavily in favor of land owners rather than buyers. So, where should a border line be drawn so both interests are satisfied? There is no easy answer. However, given the lethargic bureaucratic system we have, multiple authorities and multiple approvals would take us back to pre-liberalized days and this is unacceptable. The time for clearance must be more only for exceptional cases rather than normal ones.

2) This bill is so outdated with respect to consultation process in that Chief Secretary and various other committees will decide everything. This is not the way highways are done, this is not the way telecom market grew, this is not the way insurance market is growing. Who would decide what the procedure of consultation is? How will the consent be taken - any verbal agreement or written agreement? It is left for states to decide? Such a regressive policy makes no sense. This provision is the most disastrous and poisonous provision of this law.

3) The Real Estate costs will only escalate with time. Any delays will impact the costs and corresponding compensation dearly. Imagine if a builder wants to acquire a piece of land how much time and money has to be spent in compensation, bribing officials to clear their tenders and projects and in the actual execution. Naturally, the costs will be passed to tenants, residents and eventually escalate the costs of buying or owning a house if the builder has to pay 4 times the compensation to the land owners. At least, if the clearance process is faster we will be better off. Our Environment Minister Jairam Ramesh is having an excellent track record for the past 5 years to stall every industrial project citing environmental concerns.

4) Will an Environmental Ministry hurdle come despite clearance from the Govt for a piece of land? The law doesn't seem to clarify on this. If yes, then forget we are moving to 21st century; we are already back in 1970's.

5) There are several constitutional flaws in the law. This article explains how Govt can still misuse an acquired land for public purposes.

So, while Congress can use this to their electoral advantage, industries have already begun to hate this law. Unless a borderline is drawn the legislation despite some of the best provisions can be a very outdated law with respect to time.

Remember, Indira Gandhi did this kind of bureaucracy in every department and every sector thereby causing the current corrupt state of the country to be what is. Had she thought of liberalization her tough leadership would have propelled India into a developed country right in the 1970's. The bureaucratic system and license raj system she introduced is precisely what many legislations of UPA are filled with under her daughter-in-law Mrs. Sonia Gandhi. 

At the end of the day it is quite obvious that Congress will sell this policy as pro-farmer with the expectation they will return back to power and who knows this may well be the truth come 2014.

Monday, September 2, 2013

Food Bill passed assuring Sonia of 2014 Congress victory

Indira Gandhi from 1966-1984 (except 1977 elections where she lost) was re-elected every time because she championed the cause of poor people although poverty never got eliminated. The most disastrous consequence of such a welfarist policy led to a declining economy, but an increasing vote share for her. India grew at 3% but Congress vote share went on increasing to more than 30%. "Garibi Hatao" was her slogan but Garibi was never eliminated and India got more corrupt. "Garibi" increased under her. If that was not the case why would we still have poverty?

Sonia seems to have caught this same pulse. She knows that it is the poor people who vote and so long as they are satisfied power cannot cease to Congress. Who cares about economy anyways? Economics is always stupid while populism is always clever.  Whenever this country has seen real all around growth people seem to have voted out that Government. Indians are to blame for themselves because poor people vote, half of the middle and rich class people are hardly concerned (and yet they want Government to be good...insane !!). This happened to Congress's Narasimha Rao in 1996 and BJP's Vajpayee in 2004. People really don't know what they want. If Sonia comes back to power in 2014, it is a clear victory to people who don't care about economy. We currently have a second term PM whose silence is being projected as innocence and when the PM says global factors are affecting India, here is a clear rebuttal to this blatant lie. There are 59 countries growing faster than us (considering 5% GDP growth) in the very same global scenario as the PM is accusing of. If everything is caused by global factors- why are we importing so much and why are we spending so much when we don't have any money? PM's statements in Parliament clearly reflect bankruptcy of ideas and cover up of misdeeds by his Government. His image is declining everyday but Congress will come back as people will vote them back.

Sonia will bounce back to power with a thumping majority because of Food Bill and there can be hardly any doubt I feel. All the corruption will get covered up as people will vote for Congress back.

My problem is not the Food Bill. My problem is its timing and its implementation at a time when we really don't have a transparent system by which food can reach the poor. Let's get to some glaring facts (Source):
  • Of 79 countries on the Hunger Index, India stands at 65.
  • Rs.60,000 crore worth of food is wasted due to inadequate storage facilities - Why no step has been taken to increase the storage capacity in the 9 years of UPA rule? If this was increased the food would have been distributed to poor. This would have not costed anything on the finances.
  • Rs.2.6 crores is spent every year to increase storage capacity but this money is eaten as corruption.
  • In 2003 India had produced 63 million tonnes of food grain but had storage capacity of 48 million tonnes and the rest was sold in international prices for prices lower than market price as against allowing them to rot in India (This was under NDA rule)
  • 4.5 lakh sacks of wheat (worth Rs. 25 crore) was allowed to rot in UP in 2010. Utter waste of money. Why didn't UPA govt so concerned with the poor not take care of this?
  • 3 lakh sacks of wheat was allowed to rot in Haryana under Congress rule
  • 56,000 sacks of grain rotted in Maharashtra at a time when Sharad Pawar promised he will increase storage capacity.
  • 50% of India's children are malnourished. Malnutrition levels are worse than sub Saharan Africa. What an absurd contrast? Excess food rotting and children with no food.
  • There are enough cases of corruption in the existing PDS. There is absolutely no transparency and there are huge leakages in distribution, and money - What else can accurately explain that 50% of India's children are malnourished. Without improvising PDS Food Bill will only lead to more corruption.
  • 70% of poor never get the grains under PDS and 55% of total grain gets leaked out based on studies done in the past few years.
So, if these are shocking facts what does Food Security Bill do? (Source)
  • Aims to cover 75% of rural India and 50% urban India's poor people.
  • 5 kg of foodgrain/person/month at Rs.3 for rice, Rs 2 for wheat and Rs.1 for millets and other coarse graisn
  • Free meals for pregnant women, infants 6 months - 6 years age in the nearby anganwadi's.
  • State Food Commissions appointed to address grievances (It's laughable because these commissions would eat up money than allow the process work transparently. Any common educated man knows this)
  • State governments should make progressive steps such as doorstep delivery of foodgrains; end-to-end computerisation; leveraging “aadhaar” (UID) for unique identification of entitled beneficiaries; full transparency of records; preference to public institutions or bodies in licensing of fair price shops; management of fair price shops by women or their collectives; diversification of commodities distributed under the PDS; full transparency of records; and “introducing schemes such as cash transfer, food coupons or other schemes to the targeted beneficiaries in order to ensure their foodgrain entitlements” as prescribed by the central government.
Agreed that this country needs such a bill and it is not new since Tamil Nadu, Haryana, Chattisgarh, Andhra Pradesh, Rajasthan and Orissa already have similar schemes. If all these states have the schemes has hunger been eliminated in these? It isn't. Why? It is plagued by faulty, non-transparent processes and high corruption. Only Chattisgarh has been an exception and the central government itself can emulate Chattisgarh.

What sets Chattisgarh system of Food Bill apart? These measures below have reduced leakages from 40% to 4%. This is a model example as several economists have also agreed to. The Central Government doesn't seem to include any of these to their flagship as given below. 
  • Elimination of fair price shops by private firms and substituted by cooperatives, panchayats or women’s self-help groups; 
  • Raised the commission earned by these mediators; 
  • Computerised ledgers in godowns and, among other things
  • Sent out a diktat that all food-related grievances must be settled by district magistrates within 15 days. 
In the Center's bill why would State Commissions bother to address these issues when the grievance mechanism is not strict and quick? That is why I re-emphasize that this is a faulty bill leading to more corruption and passed at a time when money and economy are in a tight spot and it is nothing but careless spending and done solely for vote bank politics.

Costs of this bill: 

The UPA Government says it already spends 90,000 crore on food subsidy and this bill adds another 10,000 crore. So, by its estimates about 100,000 crore. This is all but a gross under evaluation of expenses. This is just to calm down the markets. Let's see how much money Government has and how it can spend. The numbers below are taken from this article.

2013-2014 Receipts of Govt (money collected by Government) => Rs.11,22,799 crore
Add Govt's estimate of Food Security bill                                  => Rs.   1,24,723 crore

  • i.e 11.10% of total money Govt gets will be spent on this.
  • Economists estimate it will be 28% since the figure given by The Government doesn't take many costs like administrative ones in this estimate
  • Commission for Agricultural Costs and Prices - Ministry of Agriculutre estimates to be 21.15%
  • Either way 20-25% of money Govt gets is being spent on Food Bill - This is 3% of GDP and this is huge financial burden. What about money for electrification, water supply, health etc? No one knows
Impact on Farming and why prices will go up with this Bill:
  • We don't produce enough rice to meet these increasing demands. Therefore, we will have to import and the amount would be in dollars. Result: Increasing deficit, and pressure on rupee.
  • Inflation will be natural if even food is now imported more than ever.
  • While farmers may get inspired and produce more rice and wheat (because the government has assured the purchase) they will stop diversifying into any other crops and vegetables. This will lead to importing vegetables.
  • Govt argues that farmers who grow vegetables will be assured of rice and wheat they will continue to grow vegetables and this may reduce the import. Will this mean that prices of vegetables will come down in the coming years? Not at all. People's lives will get worse in the coming years but people will still vote for Congress. 
At the end of this article I wish to emphasize the fact that the Congress doesn't have any explanation as to why it waited this long to make this bill pass and why it passed now.

It is often said that a hungry person cannot get satisfaction from anything other than food. Economics, politics or anything else doesn't matter to such a person. It is precisely these people that will be selected and Congress would create a hype out of this. This would turn the entire election game in the favor of Congress. If this bill has to succeed the ground work needs to be strong enough. At this point the sole aim is to win back votes and come back to power. This bill will surely do. The opposition led by BJP could not have opposed this since they too would risk losing votes if they blocked it.