Tuesday, July 22, 2014

A directional analysis of the maiden budget

The Modi government's first Railway and Union Budget  are a reflection of prioritizing promises made in the manifesto personally ratified by PM Modi during election campaign. Just like it was Arun Jaitley's maiden budget so is my analysis. The intent of writing this blog post is not to highlight the maze of numbers going into budget or aspects connected to bond and investor market, but to analyze the direction in which the Govt is headed. Of the 2 budgets passed the Railways was more path breaking than the Union Budget. The Finance Minister(FM) Jaitley had very little time and little financial resources to expand or initiate big reforms.
The maiden budget preparation time has been too short (around 45 days) and so to expect to do something from scratch in such a short time and that too with a new government in place is a lot to expect from. This was also compounded by the fact that the country is in an extremely messy and tough financial condition.

However, many well known economists have said Jaitley's budget was disappointing and called repackaged UPA's budget. It is true that Chidambaram said -"Modi talked about Congress Mukt Bharat, but he could not even do Congress Mukth Budget". It is true that lack of time and lack of money made the budget less revolutionary. However, no one denies that money has been allotted in the right sectors with right priorities. 

According to this article the NDA government added 59.9 million jobs between 1999-2004 mainly because of high expenditure on infrastructure of ports, highways and airports while UPA added only about 14 million jobs during the whole decade (2004-2014). While UPA increased subsidies in the form of farm loan waivers, oil and LPG, fertilizers etc it was expected that Modi's government would seriously think of reducing it. On the contrary it increased even more. It has to be observed that from 1999-2009 there were huge tax revenues for the government which both governments used to pay for subsidies (Source). To be fair it was NDA which started reforms giving huge tax revenues which UPA continued until 2009. During UPA II tax revenues saw a sharp fall, but the government went ahead with increasing subsidies without analyzing how to raise money for the purpose. The first budget of Modi's government was expected to increase growth despite the expected increase of fiscal deficit, but it appears that the government wants to balance both. Hence, the government retained many of the populist schemes of UPA, but has initiated the process of being pro-business.

So, here's the quick analysis of the sectors where Budget concentrated on and the direction in which these would go in the overall growth of the economy.

Regarding the power sector: Close to 80% of energy needs are still met by thermal plants and they already have reached a point where there is not much coal left. There is no proper coal distribution supply and linkage in the country today and neither is a Coal Regulator. Obviously, solar energy and other renewable energy must be tapped. Jaitley has alloted Rs.1000 crore to develop Ultra Mega Solar Power Plants in Rajasthan, Gujarat, TamilNadu and Ladakh which receive huge amount of radiation every year. I still remember the India Today Conclave Speech of last year when Modi highlighted a fact that in the intense hot regions of Rajasthan there is immense potential to tap solar energy and despite his written proposal to the then PM Singh no action was taken. Keeping this in view he has definitely asked Jaitley to allot money in such areas. Imagine if power from renewable energy reaches 30% from the existing 13% we would have added a lot of electricity to the grid. It is interesting to note while UPA's Jawaharlal Solar Mission Project's aim is to install 20GW by 2020 we are no where near that target until mega projects are actually taken off and, hopefully, this allocation will yield results. Customs Duty has been reduced for any equipment bought for this purpose. In the power sector Jaitley has also given a 10 year tax holiday on any firms that are willing to generate and start transmission by Mar 2017. This is a huge incentive that will propel companies to start getting into electricity generation and will aid in the direction of 24*7 electricity target. This Jyoti Gram Yojana that was called in Gujarat is now called Deen Dayal Upadhyaya Gram Jyoti Yojana. Further, an additional 500 Crore has been allotted to separate the distribution lines so that rural areas get high priority.

Regarding Highways: The government has promised to reduce the number of clearances and early resolution of disputes. Clearly, the government of the day knows that Public Private Partnership route (PPP) has not yielded much results and yet they have promised to reduce the disputes. It is amazing that 189 of 332 National Highway Authority of India (NHAI) projects in 20 states are struck due to disputes over environmental and legal clearances. This has scaled down our pace of roads despite huge improvement in national highway connectivity. It is beyond doubt that airports and national highways have been transformed in India, but highways require huge investment. The total length of expressways is minuscule compared to that of China. The big vision of UPA to have 44 expressways by 2022 has not taken off with just only 4-5 in progress. The problem is not lack of private builders but that of arbitrations that never end. We will have to wait and see if the government ensures the newly enacted Land Acquisition Act is amended to expedite these clearances.

Regarding Insurance: By increasing the FDI cap in increase to 49% (with full Indian Management through Foreign Investment Promotion Board. This  means any foreign company can set up its shop with 49% partnership and 51% Indian counterpart with Indian Management control). Jaitley has only increased the competition amongst insurance companies. There will be an increased capital inflow with companies willing to set up insurance markets on a massive scale now. This is a good sign.

Regarding Defence: Increased FDI to 49%. This is an area where Modi government failed to seize the opportunity despite the fact that the government wants defence manufacturing to be developed in India. For that more than 50% FDI with mandatory technology transfer must take place. This is a clear failure. However, it is not the end of the road.

Regarding Broadband in India's villages: This "Digital India" programme to provide broadband connectivity with the help of Indian hardware and software companies is a good step forward. This will spur the growth of home grown companies to contribute back to the society.

Regarding Ganga Rejuvenation:  There is no concrete plan yet to revive and rejuvenate Ganga river and around Rs.2000 crore has been set aside. Not sure where this money will go and if there will truly be a revival. For the past 15 years all the money spent on this has yielded nothing but zero result. This is the toughest gamble PM Modi has taken on behalf of his constituency. 

100 crore club projects: Continuing the trend of UPA's 100 crore projects, Jaitley announced close to 27-  100 crore club projects and they are listed here. Only time will tell if the money allotted to each of these programs is utilized with utmost sincerity.

Regarding Agriculture: The Government has decided to start a new mission to promote irrigation, a 24 hour news channel only for farmers, restructuring Food Corporation of India (a poll promise Modi made), loans to landless farmers, and reducing transportation and distribution losses and increasing efficiency of Public Distribution System (PDS). The announcement that wheat and rice will be provided at reasonable prices to weaker sections may not work on the ground unless PDS is improved. Nothing is new about improving PDS, but the fact is that a lot of money has already been spent on this and yet no changes are visible on the ground. There is no evidence that restructuring FCI would change things. Unless Agricultural Produce Marketing Act (APMC Act) is amended that allows farmers to sell to anyone they want to inflation cannot come under control and hoarding will not cease to exist. I, personally, am waiting when this act will be amended.

Regarding Goods and Services Tax (GST): This GST has been hanging around and struck in discussions despite its introduction and numerous discussions with all states since 2009. Jaitley disappointed on this since he only stated he wants to expedite it. The passage of GST and implementation across the country alone can increase GDP up to 2%.

Regards Railways: Railway Minister Sadananda Gowda's budget was a path breaking one. This was because for the first time a large sum of money has been alloted for building new tracks, improving freight transport, safety and cleanliness of stations. Modi's brain was clearly behind several of these announcements. To overhaul 10 major stations, concentrate on railway food safety and railway safety are welcome things to hear. FDI in railways is totally unheard of the Railway budgets till now. FDI is required and private participation is required to increase the track length, cleanliness of stations and freight corridor development. The Budget talked about outsourcing cleaning to private players in 10 major stations.

Most importantly, the bullet train from Mumbai to Ahmedabad requires huge investment which India can't even afford at the moment. My personal thought is that the PM Modi might seek Japan's help like in the case of Delhi Metro. When Delhi Metro was first envisaged everyone thought India can never get such a transportation system. Such negative thoughts have been proved wrong with massive metro constructions and openings in almost all major metro and several non-metro cities. Let us hope something serious on the ground happens within the next 3 years. Railway budget also concentrated a lot on increasing efficiency of online ticket booking from 2000 to 7200 tickets per minute, allowing platform tickets to be purchased online and to go paperless in 6 years. Some of the other friendly initiatives including ready-to-eat foods of reputed brands to be made available in trains, food courts of various cuisines to be set up in several stations, feedback of food quality through IVRS, battery operated vehicles for disabled people and many more. The starting of semi-high speed trains between several short distance cities in the next 1 year is a huge welcome although 160-200 km is still slow when compared to China and Japan.

It is just so shameful that of the 99 new lines announced only 1 has been completed correctly in the past 60 years and in the past 30 years, 676 projects were sanctioned and only 317 completed. Our sluggish growth has made our Railways 100 years behind current time. Hopefully this will change.

Regarding Smart Cities Creation: Rs.7000 crore has been allotted to develop smart cities which will be brand new and would avail the best of facilities an ordinary man would accept. This proposal is surely going to take forever since it is an investment that will not easily match the returns. Don't be surprised if this will not take off in the next 5 years.

Regarding start ups and young entrepreneurs: For the first time in a decade a special Rs.10,000 crore for early start ups has been allotted. 100 Crore for start ups involving rural youth, 200 Crore for SC/ST youths. This has clearly created one of the highest financial pools for start ups anywhere in the world. However, it remains to be seen how the local banks would provide these for the start ups and if there are simplifications in availing the same.

The first Budget disappointed regarding tax rules that were undone by UPA Government despite Supreme Court order of not taxing Vodafone for acquiring assets within India and abroad. Jaitley only promised to look at them under the guidance of Central Board of Direct Taxes. Such taxation rules will discourage investment and seriously must be amended.

At the end of the day this government cannot be judged by this Budget since this is a beginning and the country's finances are in such a mess that big initiatives can't be easily taken. The Government appears to be fairly serious about amending Land Acquisition, Labor Laws and APMC Acts. Unless these 3 laws are amended and passed there is no hope for growth to pick up steam and neither will manufacturing pick up easily. It is therefore paramount to see these legislations pass through.

Thursday, June 19, 2014

How Modi is shaping, shaking and inspiring his bureaucracy

Ever since Modi took oath and reached Prime Ministers Office (PMO), he has made almost every move historic. Actually, let me correct. Even before taking oath he played a masterstroke by inviting all SAARC leaders for attending his swearing ceremony. It was entirely his brainchild in order to send out a strong message that Asia's stability is more important than developing friendly relations with Europe or America.

Modi has taken some very unusual steps of getting his bureaucratic team to work with extreme seriousness and dedication. When former PM Manmohan Singh took office he made merit based appraisal to be in place every year. No one saw it happen and constantly incompetent and corrupt officials dominated the PMO. In fact, PMO was rendered powerless and all decisions were taken by Sonia Gandhi.

On the contrary, Modi has converted his PMO the ultimate decision making office. He has asked his bureaucrats to report to him first before leaking any matter to media or the public. Such a meeting happened almost after 8 years. The very first day he met all bureaucrats - 72 Department secretaries (Source)of various departments under one roof and gave them clear cut instructions on how he is accessible by email, phone, SMS, personal interaction and that he would welcome any idea that works. He made it clear asking them to work without "fear or favor" and that he would protect them in return for their complete dedication. He clearly asked them to work long hours, make their offices functional and friendly to everyone who can walk into their office. He asked them to use technology as far as possible in their functioning. He has told them to make India relevant and everything else irrelevant. 

Unlike Singh, Modi appears to have an acute sense of listening and speaking out his ideas. All this is not new to bureaucrats in Gujarat but the whole country is now witnessing this unprecedented work style.. In fact one of the news articles stated that when asked about how to get Bus Rapid Transport System (BRTS) work the official gave a few ideas and Modi said he would get back to him. 24 hours later he came up with his own ideas and a blend of both was employed. It shows how seriously Modi takes his work and implementation of his vision. There is a personal touch he adds to every initiative which makes him more accountable. His team in Delhi is waking up to this new reality. With discouraging family members or acquaintances to occupy posts in the office and asking them to work from 8 am to 8 pm 5 days a week or 6 days a week from 8 am to 5 pm - he clearly has made it very rigid for the bureaucrats to become performance oriented. Typically, these bureuacrats are Indian Administrative Officers (IAS) who report to their respective Minister. Under Singh, the PMO gave full freedom to the Ministers asking them to depend on these officers and take decisions. If the head of a team is not cognizant of what his team is up to the team collapses in no minute. This is true to anything - be it sports, a movie production, a company or even a society. The former PM was not strong enough to show his command and authority. Modi, however, has set a very strong foundation where he has categorically stated he won't tolerate  any such acts. His 10 point agenda for all bureaucrats is truly noteworthy and he has chosen fairly a reliable team.(source)

Modi talks sharply and crisply is a matter now well known. The very first day in office he asked all his Secretaries to make Power Point Presentations conveying what projects are stalled, what can be done and all had to be in bullets and no lengthy paragraphs or theoretical data. This itself shows he means business and that he expects his officials not to form committees for no reason to research something. Here is an article that explains how bureaucrats were excited and motivated to work after their interaction. Some of them were even worried to tune to Modi's style.

Modi has chosen some really impeccable officers of the highest integrity known to India in his core team. He is relying more on these officials than his own ministers. He wants his ministers to take political actions while the officers take policy actions. Here is a very interesting article that explains how Modi chose his core team of bureaucrats and why he chose ones with high merit and proven track record. This is truly motivating.

Modi himself puts 18 hours of work a day. This act of Modi is beginning to inspire several honest and committed bureaucrats to follow suit. He has never taken a vacation as CM of Gujarat even for a single day according to his own tweet. His relentless energy is visible in whatever he does. His team is just astonished to see his energy.

He scrapped GOM, EGoM (Video) which were formed during UPA and the committees did nothing but just met and did some paper work without really coming up with concrete implementations. This is truly one of the best steps because we don't need committees but people who are committed to taking actions.

Another interesting thing is when Modi asked all bureaucrats to report to him on any final decision without just conveying it to their respective MP's. Unlike the previous regime where bureaucrats would override PMO, Modi has asked that PMO overrides every MP and every bureaucrat. Basically, nothing goes out with Modi and if anything has gone he would get to task of correcting it. Such steps work as long as the leader heading the team is vigilant on every activity. Modi has shown to be so vigilant in Gujarat and he will be so.

The new phrase these days doing the rounds is "The Prime Minister is watching you".

Just within a fortnight he has set up so many meetings, met so many officials - sometimes as late as 9 pm. 
An interesting article was published here which stated that everyone is struggling hard to cope up to this work style. Here is another where ministers are expressing it is not easy to take a vacation unless results are shown.

Despite this workaholic style of working, Modi seems to find time to communicate directly to people through Twitter. He creates his own media and speaks directly to the very people to whom he is accountable. It is this distinctive style that has made him a very special politician seen in the last 30 years. 

While all of this is truly path breaking and a solid foundation is now laid we have to wait for results. The challenges and promises made are huge. Such groundwork seems to be promising, but having a good team is one and performing during crucial circumstances is another. A team's best test is when it has to perform in a harsh terrain. India is a harsh terrain in every angle - social, economical, financial or geo-political. It  is too early to comment on the team's performance since the journey has begun.

Many promises Modi made are quite tough to implement across the country. River linking, creation of 100 smart cities are just two of them to mention. Many action plans that have worked in Gujarat are tough to replicate across the country especially in states where the anti-Modi parties function.

One thing is for sure. A true action-oriented person who has occupied the highest post. He has his task cut out and let's hope that this good team indeed does some good work.

Going by the standards of how our bureaucracy functions in all states cutting across all political parties, it is a welcome change to see the spirit with which Modi's team of bureaucrats are beginning to perform.

The PM has already indicated that he will take harsh steps which may not please everyone who loves him. Let's see if these steps are harsher than the harsh conditions we already are facing.

Tuesday, May 20, 2014

An unfathomable victory of the Modi led BJP

BJP's victory and ride to power in 2014 is truly unfathomable. As a student of Indian politics since 1998 I always had a firm belief that a non-Congress party will never get a majority on its own. Even when BJP (that claims to be the other pole of Indian politics) rose in numbers from 2 to 189 it was still believed to be difficult to see a day of it getting an absolute majority. The quote - "Every dog has its day" was too difficult to be applied for any non-Congress party in this context. Congress's reach to the remotest parts of the country is unbeatable and the strategy to get rural votes is best known to Congress and hence they have been invincible time and again.It's leftist approach in 70's and rightist approach in mid 90's attracted every section of the society towards it. Every caste and religion found a place in the party. It was a fortress that was impregnable until the rise of regional parties in mid 1990's .With the shocking loss of NDA in 2004, UPA came to power and the first UPA term had some innovative ideas but in the 2nd term it turned leftist when the country was moving towards rightist tendency. It made a gross miscalculation in gauging this public mood.

When Assembly elections were held last year Congress lost all of them and it was too late to make any reversal of its policies. It was a wake up call. The party was over confident that its pro-poor policies will win them every vote. My personal dislike with the way Congress started going to 1970's era intensified with the passage of Food Security Act. The drubbing Congress got need not be elaborated. It is crystal clear.

BJP getting absolute majority on its own has changed the political scene for many years to come. Truly, BJP has now become the other pole in Indian politics. Of all the leaders Modi was the only one who was confident of achieving this feat. Even though exit polls were giving signals of a BJP led government I was sure of NDA getting majority but not BJP on its own. The way Modi campaigned throughout India has set a new benchmark in election campaigning. Modi used one tactic which was a great gamble. This tactic was to change the tone and tenor depending upon the place he campaigned. Here is an article that explains how Modi attracted people in different parts of the country by connecting people's hearts easily. This is an unseen strategy by a politician in India. Indira Gandhi could connect naturally everywhere she went because she projected herself as Nehru's daughter and Nehru had a reach no politician can match till date. For a person with no such background to market himself, and to make both aggression and future vision as the center of campaign was the greatest gamble. Another huge gamble he played was to confidently tell people why he fits the PM post and made it centric to him.

As Modi took this daunting task head on he carefully planned to bust the perception that BJP cannot make a presence in South and Eastern states. He silently made NDA an alliance of 17 parties  from just 4 within a few months after he was announced PM candidate. In addition to all these efforts he crafted a brilliant marketing campaign unseen and unheard in Indian political history. His oratory skills is by far the best we have seen after Vajpayee. Modi spoke exactly that was in tune with the aspirations of the people. His focused speeches with clarity of thought removed several myths and notions people had about him. He traveled 3,00,000 km, addressed 437 big rallies, 5827 public events spread over 25 states. His "Chai Pe Charcha" program and reaching out to the remote villages in UP explaining how development had changed Gujarat opened the eyes of millions of people and raised the hopes of a better future. His slogan "Sab ka vikas, Sab ka saath" catched everyone's attention. The use of the word "development" in all his speeches dominated more than the words "communal" and "secular" used by almost all parties anti to BJP. 

This scale of campaigning and victory is unfathomable to not just politicians of other parties but to many inside BJP itself. The old guard of BJP lost the hope to see a day like this after Vajpayee retired in 2005 from active politics. Over the next few weeks journalists, psephologists, sociologists, thinkers and historians will continue to unravel more stats. Here are just some of the startling stats revealed so far. Of the 31 string Scheduled Tribes constituencies, 21 were won by BJP. Of the 80 seats in UP BJP won 71. Of the 16 seats in UP where Muslims dominated between 20-50% BJP won all of them. This doesn't mean Muslims overwhelmingly supported BJP, but a large number of them definitely did. The party that was known to be a Brahmin party gained almost all of the OBC and Dalit seats in UP and Bihar. It appears that the caste perception barrier was broken when Modi reached to everyone and asked to them to fight poverty than against one another. In 10 states Congress did not open an account. In states where it was strong was proved weak. BJP has 31% of the total vote share and it sprung into majority. This as per many stats is the lowest voteshare that gave absolute majority to a party at the center. The Congress used to have 40-70% vote share that converted to a majority in its glory days. Here's another very interesting article that illustrates a fact that of the 12 largest states (Uttar Pradesh, Maharash­tra, West Bengal, Andhra Pradesh, Bihar, Tamil Nadu, Madhya Pradesh, Karna­taka, Gujarat, Rajasthan, Orissa and Kerala) that account for 440 (81% of seats to Lok Sabha) seats BJP won 61% of seats - something no party has ever been able to achieve including Congress anytime ever.

No matter what one says this victory is purely Modi's, not even BJP's. He worked so tirelessly and campaigned aggressively that many within the party did not even go to even half the distance he traveled. His idea to reach the remotest corners of the country where BJP doesn't even have a presence was something the party had to do in 2004. He did this and he will continue doing this. He is known for taking a task and not relinquishing it until finished to perfection.

Now that the victory celebration is done it is time to serious work. If one has observed his track record he is known to surprise everyone by his sheer hard work and political acumen. After declaring himself Mazdoor Number 1 we have to see to witness this at a national scale. There are many promises Modi made that are feasible and some that are very daunting given the complexity of India. It is often said that the greatest hurdles come in the way of people who have the greatest will power. It is such a moment in India now. Let's hope for the best.

In the days and years to come he will be judged by how he takes the country forward. People,however, must have patience since "Rome was not built in a single day".

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?"