Monday, November 27, 2017


Circumstances have brought about a change in Rahul Gandhi. More complex circumstances are forcing the Congress Party to change. Gujarat elections are the first of a three-stage test that will decide whether the Congress lives or dies (the others being Karnataka elections a year from now and then the general election). The party is fighting bravely in Gujarat, and shrewedly, too, if the alliances with Patidars and Dalits are any indication. But is that enough to get the better of the richest party in the country? (Reports mention, not hundreds, but thousands of crores of rupees being brandished about. So much for the victory over black money).

The Congress needs an internal revolution to survive. This is history's revenge. As a national movement for independence, it had earned the emotional backing of people en masse. Independence won, it should have wound up, as Gandhi advised, so that political organisations would have a level playing field in the new game of democracy. It chose instead to take unfair advantage of the afterglow of the freedom struggle, thereby becoming more equal than others. That advantage lasted only a few years. Then rot set in.

The undemocratic nature of dynastic rule made the rot spread fast. Rahul Gandhi's ascent to yuvaraj status brought the Congress to its lowest ebb thanks to his absences and arrogance in the early stages. Recall his barging into a press conference and publicly downgrading his own party's prime minister by tearing up an ordinance issued by the Government. It came as a surprise that the same man impressed audiences with his mature ways during his US visit in September. At 47, it was about time.

The flowering of Rahul Gandhi gives hope that his appointment as Congress President (expected in December) may bring about the reforms the party badly needs. The first priority is to give the party a new energy with a set of young faces. This won't be easy because every Congress leader above 60 is convinced that he deserves to be the Prime Minister of India. Note how P. Chidambaram objected when A.K.Antony's name came up as a possibility for the vice-presidentship of the party. That Antony cannot unite even warring Congressmen in Kerala is as evident as the fact that Chidambaram does not have a single constituency in this vast and fertile country that he can consider safe. But nothing stops Congressmen from pulling down one another.

India is the only democracy in the world where the Indian principle of vanaprastha is unacceptable to politicians. Rahul Gandhi's task is to bring in a New Guard without driving the Old Guard into belligerence. Some may resort to demonstrative vengeance by walking over to the BJP, but the Congress President will do well to hold fast knowing that there is a mood change in the country.

BJP has been in power long enough for people to see the gap between word and deed at the government level. The Prime Minister holds forth on grand dreams, great principles and wonderful ideals. On the ground, the jobless turn desperate, farmers abandon all hopes, the middleclass go crazy over GST-Aadhar idiocyncracies and, worst of all, a new criminality called lynching becomes part of a new patriotism. These sham patriots publicly call for the beheading of people they don't like. The Government encourages them by not taking any meaningful action to put them down.

That all this is done in the name of Hinduism must be abhorrent to a great many Hindus, hence the change in the public mood. In all religions the fanatics compromise the faithful. Atrocities like the Spanish Inquisition made a mockery of Christianity in Europe. The murderous advances of fundamentalism violate Islam across the world. Sanatana Dharma had sustained its greatness until narrow political ends turned it into an electioneering tool. India deserves to get back to a state of equilibrium where the faiths that sustain people are not misused for petty political purposes.

The BJP will continue to use religion as a polarising force because obviously it is unable to do the right thing: Winning popular support through policies that make life easier for the people. That the public has recognised this reality is Rahul Gandhi's opportunity. Across the country there is a growing realisation that something somehow must put an end to a culture that enables self-styled nationalists to offer rewards for cutting off an actress's nose. It is a shame that we have a system that does not put such anti-nationals in jail.

Monday, November 20, 2017

India has broken its own traditions by joining US-led strategic group. This will restrict Delhi's options

Did India gain from last week's Southeast Asia summit? The big takeaway, as admitted by our External Affairs spokesmen, was a "deepening of engagement" with the US. This is useful upto a point. America is the only power with the capacity to checkmate an increasingly assertive China. But America's interest in using this power for the common good is open to doubt. President Trump is basically an "America First" bargainer and he was quite happy bargaining his way into $235 billion business deals with China on his way to the ASEAN summit. This narrow vision of the US President makes our big takeaway from the summit look not all that big.

In a broader strategic sense also, the wisdom of India joining a quadrilateral alliance against China is questionable. The 'quad' as it is now called was originally a pentagon, but Singapore, recognising the elephant in the room, withdrew. Australia is an existential ally of America. Japan, worried about China's growing might, clutches every available straw but also tries to mend its ties with Beijing. India has the biggest stakes in the game with border disputes on the one hand and Pakistan's scheming on the other. The traditional posture of non-alignment would have given India more space for bilateral diplomacy.

The External Affairs Ministry claims that Southeast Asia sees India as a "dependable partner" and wants it to be "more assertive" with Beijing. This is self-deception. The fact is that, barring Vietnam, all countries in the region have reconciled to China's dominance. Singapore's is the most calculated switch for it plans to be a hub of Xi Jinping's dream project, the Belt-and-Road network. The Philippines faced the ground reality in a different way. In August it had tried to put up a makeshift structure on a sandbank within its territorial waters.China despatched a naval force whereupon Manila stopped work and pulled out its troops. China isn't open to any compromise.

Vietnam is different because of history. Although China was on its side during the Vietnam wars, the two countries have been in conflict from the third century BCE. Modern guerrilla warfare was said to have been invented by the Trung sisters who led the rebellion against China in 43 CE. After Vietnam defeated America, Chinese troops invaded its northern region leading to tens of thousands of deaths on both sides. China withdrew without victory. The ugly episode was the result of Vietnam destroying the tyrannical Pol Pot regime in Cambodia; China saw Pol Pot as an ally.

More consequential was a Chinese naval attack on Vietnamese boats in 1988. Tiny Vietnamese islands in the nearby waters were taken over by China. That was early warning about what has become China's mainstream policy today: Militarising all islands in the region under the Chinese flag.

Vietnam is not big enough to engage China militarily. But then, it was not big enough to take on the US either. Yet its barefoot army defeated the world's most powerful war machine. The Vietnamese people's spirit of independence combined with their genius for innovation will pose a challenge China may not face elsewhere. The Vietnamese will fight for more centuries if necessary.

From 1988 India has been involved in oil exploration off the Vietnamese coast, ignoring Chinese protests. This India-Vietnam collaboration has political advantages. But India's best strategic option is to be in active negotiations with China. Relations with other countries, prudently managed, can strengthen India's position in such negotiations -- relations with US, Russia, Europe and even Vietnam and major stand-alone powers like Iran.

This is where identification with just one power group led by the US becomes a liability. The US has a record of refusing to pass on technology of any kind to India whereas Russia has given high-end military ware along with technology transfer. Ironically, India's deepening of engagement with the US seems to have coincided with a worsening of engagement with Russia.

Russian news portals have reported that India allowed an American technical team to inspect INS Chakra, the top-secret Russian nuclear submarine on lease to India from 2012. India has denied the report, but will Russian media play up such a story without political clearance from above? This happens when India wants another nuclear submarine from Russia.

The "Indo-US global strategic partnership" is good for the US, but India ought to develop ideas that are good for India. Being a junior member in a US-led quad is playing the US game. Smartness lies in getting others play the Indian game.

Monday, November 13, 2017

DeMo, GST, etc: How to create a mess, then make it messier. Now, link your Aadhar number to your sambar-vada

It is difficult to imagine that a full year has passed since 1000-rupee notes disappeared from our world. Champions and critics marked the occasion by bitterly attacking one another. The champions were highpitched as they celebrated the anniversary and boasted about three lakh fake companies that were closed down and the detection of fraud involving Rs 4000 crore. Quoting their rhyme-loving leader, they said hard work had beaten Harvard.

In a country so cleansed, the critics were handicapped. But their numbers were large. A survey by this newspaper showed that half the people (47.58 percent) thought that DeMo was a bad idea. As many as 60 percent said it failed to reduce black money; 66.52 percent said it did not eliminate corruption.

When Manmohan Singh said in Parliament that notebandi was "legalised blunder", he didn't cut much ice because he was a Congressman and his records as a Congress Prime Minister was pathetic. But he got more mileage when he spoke as an economist in Ahmedabad last week and asked: "By questioning bullet trains does one become anti-national"?

We have forgotten those who died amid the chaos of notebandi. Manmohan Singh said "more than 100" had died. Wire services listed names and locations of 90, including a bank peon in Pune who succumbed to stress handling large crowds 12 hours a day, and many elderly people who simply collapsed waiting in queues.

Government partisans said the deaths had nothing do with the currency reform. Finance Minister Jaitley dismissed "initial inconveniences" and said the absence of social unrest and "any significant economic disruption" showed that DeMo was a great achievement.

There was no social unrest even when the Emergency denied citizens the right to life. But people kicked out Indira Gandhi. On disruption, the Honourable Minister could not have been more wrong. Take just one example: Surat and Tirupur, crown jewels of India's textile exports, were devastated overnight. It was a 400-crore-a-day business in Surat, a 50,000-crore-a-year backbone in Tirupur employing ten lakh workers. Surat was cut down by half. Tirupur, dependent wholly on textiles (unlike Surat which had diamonds, too), was reduced to a graveyard. Are these, too, "initial conveniences?"

The obstinacy with which the Government continues to justify every detail of its decision adds further dimensions to the damage already done. As Kaushik Basu pointed out: "A bigger worry than the demonetisation itself is the failure to recognise that it was a mistake. That is what is getting investors and businessmen worried about future policy decisions".

The biggest conundrum is that, to this day, nobody knows what it was all about. To cut off black money? To starve terrorists of funds? To promote digital economy? The Honourable Finance Minister swears that all these policy objectives have been achieved. It must be one of the great pleasures of life to sit in an ivory tower and believe that you are the wisest that Brahma ever created.

But Brahma himself will have trouble figuring out the sarkari logic regarding high-value currency. We were told that 1000- and 500- rupee notes were made illegal because they made it easier for bad people to store unaccounted money. Then why were 2000-rupee notes introduced, making it easier still for bad people? Within days of the pink note's appearance, Indian genius produced stacks of fake 2000-rupee notes. Stacks of banned old currency are still being transported around by traders who ain't fools. What's going on?

What's going on is a huge big mess. Notebandi created a confusion that other brainwaves compounded, making life miserable for everyone. GST was supposed to simplify the tax system. What it has done is: You pay tax when you earn money, and you pay tax when you spend your money. Worse, you pay more for your sambar-vada and your vitamin pill. There is a GSTN, a network to make tax-paying easy. But when you pay something, the receipt says something else. Errors are justified as server delays and/or session timeouts.

Then there is Aadhar, a simple idea turned into a torture chamber. One day you are told to link Aadhar with your marriage certificate. The next day you are told to wait until the courts decide whether your marriage is fake or love-jihad. You then have to link your Aadhar to your pancard, the page number of the book you are reading, the number of vada-pavs you can eat in one go and finally your dhobi account. Never forget it is a privilege to be a citizen linked to links.

Monday, November 6, 2017

Abdul Karim Telgi, Harshad Mehta were geniuses of crime; But a philosophy evolved: 'Money is very bad, sir'

Abdul Karim Telgi's passing should remind us that only in India are criminals so creative. Legends like Chicago's Al Capone and the Sicilian "families" of New York's gangsterdom got the limelight because of films and books. But they were run-of-the-mill killers and looters. No originality. Only in India did criminals develop the imagination to become ministers and MLAs. The genius criminals rose above politics as well. To this group belonged Telgi and Mehta.

No two men could have been more different. Telgi, son of a porter, eked out a living by selling vegetables on trains passing through his native place in Belgaum district. But he showed his mettle by using his earnings to attend an English-medium school and eventually get a B.Com degree. Harshad Mehta was also born in a poor family. With his Gujarati business instincts, he was too impatient to go to college, preferring to get specialised education as a broker in Bombay. Telgi moved in middleclass circles as a struggling travel agent in Bombay while Mehta mixed with the shakers and movers of a bustling business district.

Imagination soon started sending both men into similar trajectories. As a travel agent, Telgi had to procure various documents, from ID cards and mark sheets to visas and birth certificates. He developed shortcuts and some fake visas he issued landed him in jail in 1992. A jailmate educated him about the attractions of stamp papers. The Telgi imagination was set alight.

Harshad Mehta developed into a flamboyant, self-assured operator with the capacity to convince others about the charms of his dreams. He found mere brokering boring, but he also found unusual possibilities in the business. It is the nature of genius to see what others have not seen before, then pursue new goals with impatience.

When it became a rule in the 1990s that banks should invest a minimum amount in government bonds, Mehta's original mind developed what was respectfully described as the Replacement Cost Theory. It merely meant that he helped bankers meet their obligations and even make a profit on the sidelines by operating through him. It also meant that while the banks moved their moneys, some amounts always stayed with him for a short duration. He would invest that money in shares. In the most notorious investment he made, ACC shares jumped 4400 percent from 200 to 900.

Small wonder that the house of cards came crumbling down one day. Mehta had acquired fancy homes and a fleet of several dozen fancy imported cars. All that turned into nothing when he was sent to jail. He died there in 2002.

The Big Bull was credited with a scam that ran into Rs 5000 crore. That was considered sensational, incredible, etc. To understand Abdul Karim Telgi's genius we must reckon that his stamp paper scam was quantified at Rs 20,000 crore. There were subsequent reports that raised it to Rs 32,000 crore. The unsophisticated Telgi's empire was six-seven times bigger than the urbane Mehta's. Limitless is the imagination of the gifted.

The stamp-paper lessons Telgi learned in jail offered much scope thanks to the sarkari culture of stamped sarkari paper for everything: court fee stamps, revenue stamps, notary stamps, foreign bills paper, share transfer certificates, insurance agency stamps. These papers were bought and kept in bulk by banks and insurance companies.

Telgi went about it with the thoroughness of an inspired inventor. He acquired the licence of a stamp-paper vendor from the Bombay Government. Then he acquired a specialised stamp paper printing machine from, who else, the Indian Security Printing Press in Nasik. The high-security press is not supposed to do such things, but in Telgi's case, technicians from Nasik set up the press, helped him get stocks of the special paper and special ink and even the same security marks as used in Nasik. Substantive help arrived also from politicians and police bosses, among them a Maharashtra home minister, City Police Commissioner and other high-rankers. How come so many VIPs helped him? Meri Aan Meri Shaan Meri Jaan Hindustan.

When he was convicted in 2007 and transferred to Bangalore jail in 2015, Telgi pleaded guilty and said: "I am the only breadwinner in my family. I'm suffering from various ailments which have no cure" (AIDS, meningitis and diabetes).

He also spelt out a philosophy. "Money is very bad, Sir", he told an investigating official on his way to jail. "It makes a man as well as destroys him". This man would have made an inspiring political leader.