Here is an interesting study recently done. Establishes, through a fairly intensive empirical exercise, the effectiveness of RTI as a tool against corruption. In this case, the public service being "tested" was issuance of ration cards. The results are illuminating. Shows out clearly that using RTI as a tool is as good as paying a bribe! Ergo, there is no material marginal cost to the poor in not giving a bribe, as he has a policy tool at his disposal.
Which is where the current India Against Corruption frenzy misses. We have a dearth of good policies that lead to corruption. And again, inadequate policies lead of generation of black money.
One, the two are linked in some ways, but not the same...Black money is simply income generated on which no tax has been paid..Primarily, it arises becase of 3 reasons
1. Tax levels are too high - people dont want to pay tax
2. Tax regime is too complicated - its too messy, hence people look to take the easy way out
3. Tax regime is full of loopholes, encouraging people to evade taxes
In India, we have had massive movement in #1 sicne reforms - our rates are in line with rest of Asia...But 2 and 3 are largely pending..the GST and DTC are the big bang reforms to adress both those issues..Unfortunately the GST has been hanging fire for 2-3 years now, thanks to the cussedness of a few state govts...Once done, these should substantially make the tax regime simpler and better monitorable...The amount of black money generated through normal "business" should automatically reduce (we have seen that with reduction in tax rates as well)..Which is what Ila Patnaik said in an IE column..
Corruption on the other hand is a 100% criminal activity, but the really large part of it is due to one reason - very large residuary (or discretionary) powers with the govt..Reforms was supposed to take discretionary powers out of govt hands...Unfortunately, due tovaious reasons, there are still too much discretion left with the govt..Primarily because regulatory regimes have not kept pace with increased demand for various things, esp natural resources and changes in technology...There is a large pending agenda on this...Mining Rights laws, strengthening regulators in various natural resources sectors - this is a vast area, this is what is sometimes described as "2nd gen reforms"...This givt has been singularly criminal in not acting on the above, despite its mandate...
Unfortunately, the "I am Anna" movement misses the big picture - Nandan Nilekani was right!
Thursday, August 25, 2011
Monday, August 22, 2011
Perspective - from an unlikely source
Kafila is an interesting blog - run by the Left Liberalati, but often at odds with the puritan strains of the Left elite...
They have an interesting take on the attitude of the Left towards the Anna movement.
They have an interesting take on the attitude of the Left towards the Anna movement.
Anna..even more..But really this far, and no farther...
Pratap Bhanu Mehta with a sensible suggestion to end the impasse...
Must say this is going to spaces that should make the core of Anna's support group (middle class Indians) very very uncomfortable. Look at the some of the collateral noises being made..
1. This is all because of "reforms" - the PM alluded to it in the IIM, Cal Golden Jubilee speech (separately, its a pity that the IIM-C event happens now, takes the attention away!). What balderdash! If anything, corruption is a result of not enough reforms. People remember the typical corruption cases in the '70s and '80s? Cement quota, gas quota, telephone quota - these were simply taken out of the equation because of MMS's 1991 effort. But with people like the Bhushan's, Swami Agnivesh and Medha Patkar (motivated, dedicated activists all, but with distinct ideological bents) joining the effort, the narrative is bound to get tricky.
2. "My way or the highway". I was listening to a speech by Arvind Kejriwal - the entire tenor was, "Jan Lokpal is all perfect, anything else is a vested interest talking". Tomorrow, SAS Geelani can sit on a dharna and fast @ Jantar Mantar, and say "my version of the Kashmir solution, ie, integration with Pak, or nothing else". The spirit of give-and-take that is at the core of a liberal democratic society is missing in the narrative. Again, something that the middle class supporters of Anna should worry about.
3. As a real collateral damage, the government is being let off the mat on crucial pending policy decisions - from GST to FDI in retail - stuff that is absolutely critical to countering the oncoming "Endgame" (as John Maldin describes it).
Must say this is going to spaces that should make the core of Anna's support group (middle class Indians) very very uncomfortable. Look at the some of the collateral noises being made..
1. This is all because of "reforms" - the PM alluded to it in the IIM, Cal Golden Jubilee speech (separately, its a pity that the IIM-C event happens now, takes the attention away!). What balderdash! If anything, corruption is a result of not enough reforms. People remember the typical corruption cases in the '70s and '80s? Cement quota, gas quota, telephone quota - these were simply taken out of the equation because of MMS's 1991 effort. But with people like the Bhushan's, Swami Agnivesh and Medha Patkar (motivated, dedicated activists all, but with distinct ideological bents) joining the effort, the narrative is bound to get tricky.
2. "My way or the highway". I was listening to a speech by Arvind Kejriwal - the entire tenor was, "Jan Lokpal is all perfect, anything else is a vested interest talking". Tomorrow, SAS Geelani can sit on a dharna and fast @ Jantar Mantar, and say "my version of the Kashmir solution, ie, integration with Pak, or nothing else". The spirit of give-and-take that is at the core of a liberal democratic society is missing in the narrative. Again, something that the middle class supporters of Anna should worry about.
3. As a real collateral damage, the government is being let off the mat on crucial pending policy decisions - from GST to FDI in retail - stuff that is absolutely critical to countering the oncoming "Endgame" (as John Maldin describes it).
Wednesday, August 17, 2011
Monday, August 15, 2011
Anna Hazare - good or bad?
Interesting take by Pratap Bhanu Mehta. PBM consistently has some of the best "takes" on politics..
Thursday, August 11, 2011
NSG guidelines on ENR - a "betrayal", or a challenge?
Recently, the Nuclear Suplier's Group (NSG) adopted new rules on transfer of ENR (Enrichment and Reprocessing) technologies. It was widely interpreted to be detrimental to the "clean waiver" that India received as part of the storied Indo-US "nuke deal".
But what is really the impact? My take...
There is a huge amount of confusion and lack of understanding on the isue of nuclear commerce in general, NSG/waivers et al in particular...That is expected, but then it means that the debate in "popular" fora on the issue becomes polemical rather than topical and rational..
First, what is NSG? NSG is a group of countires who have voluntarily come together to set out standards of nucelar commerce and curb non-proliferation...
Second, what are these NSG "guidelines", of the sort that the recent meeting of NSG passed w.r.t ENR tech? These are "voluntary" guidelines that members are expected to follow while trading with other countries..
Ergo, each member nation is really "free" to carry on as they jolly well wish, technically speaking..We have had numerous instances of that...Russia supplying fuel for Tarapur in 2001, when 32 out of 34 members of NSG then publicly commented that the action would circumvent Russia's NSG commitments...Or indeed, Kudunkulum 1/2, which technically could be argued were outside NSG guidelines...More recently, China's supply of Chashma 1/2 (and now 2 more) to Pak could be described similarly...
The question therefore is, if everything is "voluntary", why bother? What is the big deal about the NSG "waiver"? the answer, simply is, "institutional shame", if I may use that word..While NSG is a voluntary group, its members have sworn collectively to implement a set of non-proliferation guidelines...Therefore, every time a member of group chooses to do a trade that clearly "violates" the guidelines, it marks itself out as an 'exception"....Given the optics, no country wants to be known publicly as a serial "violator", not on an issue as touchy as nuke proliferation in the international context. (mind you, one is not talking of AQ Khan style proliferation, which is anyway outside the "system")...
Hence, each trade of that sort becomes a political battle to be fought...And diplomatic credits encashed....Russia's fuel supplies to Tarapur, or Kudumkulum, or indeed Chashma by China - each deal involved enormous amounts of public posturing, diplomatic battles...Net net, its not a scalable model if people are interested in scaling up trade...
Now that is exactly what India's objectives were...We were looking to scale up - on fuel supplies, on new power plant tech, and of course, on ENR as well (along with tons of other nuke related tech)....The only way to do that would have been to get a "waiver" from NSG, ie, an institutional recognition that we are "kosher"...Which would simply enable all member countries to enter into formal nuke supply agreements with us (123 style), and carry on trade in "normal, scalable" fashion..Which is precisely what has happened..We have concluded 123-style agreement with a host of countres - Russia, France, Kazakhstan, Canada and some more..With a few more in the pipeline - Japan, NZ etc...(The voluntary nature of the arrangement is also visible on the flip side as well - even though we are now kosher, Australia has demurred on entering into an agreement, on account of purely dometic issues)...
Importantly, trade has started - most conspicuously of fuel, but baby steps on LWR reactors from Russia and France as well...
Where does this ENR thing fit in the narrative? At the margin, its problematic...(It was always problematic, as there was little support for this aspect of the deal in the US legislature, even when there was widescale support for the deal itself - and private commitments were said to be given by the Bush administration to select legislators on that)...But at the same time, the voluntary aspect of NSG now comes into play...India is a "kosher" member of the "club" (trading gorup, not NSG, yet)...So France can sell us the reactor, the technology, the fuel...And through the same bilateral contract, ENR tech as well (something that they have publicly confirmed in the recent past)...It would still create a bit of noise, but given that its India, and given that the rest of the deal is fully "compliant" - the dollars to France (Euros rather!) will likely speak louder than that noise...In practical terms, India is actually more worried about the "optics" of the new guidelines than the real impact - we had an interview of Srikumar Bannerjee where he clearly says that he isnt really interested in ENR tech...And the way to deal with the optics would be to hasten bileteral trade - which is what the whole deal was entered for! Unfortunately, the last few months have been lost on account of the various corruption related noise, as also Fukushima...
Last bit, on our membership of NSG...Why is it a "game changer"? Simple..All rules/guidelines of NSG are set by consensus...Once we are a member, efectively there cant be a guideline implemented that goes against our interests!
There is a nice article by Harsh Pant on this - its a bit incomplete, but useful..
For those interested in the arcana, here is the US 123 agreement and the NSG waiver to India.
But what is really the impact? My take...
There is a huge amount of confusion and lack of understanding on the isue of nuclear commerce in general, NSG/waivers et al in particular...That is expected, but then it means that the debate in "popular" fora on the issue becomes polemical rather than topical and rational..
First, what is NSG? NSG is a group of countires who have voluntarily come together to set out standards of nucelar commerce and curb non-proliferation...
Second, what are these NSG "guidelines", of the sort that the recent meeting of NSG passed w.r.t ENR tech? These are "voluntary" guidelines that members are expected to follow while trading with other countries..
Ergo, each member nation is really "free" to carry on as they jolly well wish, technically speaking..We have had numerous instances of that...Russia supplying fuel for Tarapur in 2001, when 32 out of 34 members of NSG then publicly commented that the action would circumvent Russia's NSG commitments...Or indeed, Kudunkulum 1/2, which technically could be argued were outside NSG guidelines...More recently, China's supply of Chashma 1/2 (and now 2 more) to Pak could be described similarly...
The question therefore is, if everything is "voluntary", why bother? What is the big deal about the NSG "waiver"? the answer, simply is, "institutional shame", if I may use that word..While NSG is a voluntary group, its members have sworn collectively to implement a set of non-proliferation guidelines...Therefore, every time a member of group chooses to do a trade that clearly "violates" the guidelines, it marks itself out as an 'exception"....Given the optics, no country wants to be known publicly as a serial "violator", not on an issue as touchy as nuke proliferation in the international context. (mind you, one is not talking of AQ Khan style proliferation, which is anyway outside the "system")...
Hence, each trade of that sort becomes a political battle to be fought...And diplomatic credits encashed....Russia's fuel supplies to Tarapur, or Kudumkulum, or indeed Chashma by China - each deal involved enormous amounts of public posturing, diplomatic battles...Net net, its not a scalable model if people are interested in scaling up trade...
Now that is exactly what India's objectives were...We were looking to scale up - on fuel supplies, on new power plant tech, and of course, on ENR as well (along with tons of other nuke related tech)....The only way to do that would have been to get a "waiver" from NSG, ie, an institutional recognition that we are "kosher"...Which would simply enable all member countries to enter into formal nuke supply agreements with us (123 style), and carry on trade in "normal, scalable" fashion..Which is precisely what has happened..We have concluded 123-style agreement with a host of countres - Russia, France, Kazakhstan, Canada and some more..With a few more in the pipeline - Japan, NZ etc...(The voluntary nature of the arrangement is also visible on the flip side as well - even though we are now kosher, Australia has demurred on entering into an agreement, on account of purely dometic issues)...
Importantly, trade has started - most conspicuously of fuel, but baby steps on LWR reactors from Russia and France as well...
Where does this ENR thing fit in the narrative? At the margin, its problematic...(It was always problematic, as there was little support for this aspect of the deal in the US legislature, even when there was widescale support for the deal itself - and private commitments were said to be given by the Bush administration to select legislators on that)...But at the same time, the voluntary aspect of NSG now comes into play...India is a "kosher" member of the "club" (trading gorup, not NSG, yet)...So France can sell us the reactor, the technology, the fuel...And through the same bilateral contract, ENR tech as well (something that they have publicly confirmed in the recent past)...It would still create a bit of noise, but given that its India, and given that the rest of the deal is fully "compliant" - the dollars to France (Euros rather!) will likely speak louder than that noise...In practical terms, India is actually more worried about the "optics" of the new guidelines than the real impact - we had an interview of Srikumar Bannerjee where he clearly says that he isnt really interested in ENR tech...And the way to deal with the optics would be to hasten bileteral trade - which is what the whole deal was entered for! Unfortunately, the last few months have been lost on account of the various corruption related noise, as also Fukushima...
Last bit, on our membership of NSG...Why is it a "game changer"? Simple..All rules/guidelines of NSG are set by consensus...Once we are a member, efectively there cant be a guideline implemented that goes against our interests!
There is a nice article by Harsh Pant on this - its a bit incomplete, but useful..
For those interested in the arcana, here is the US 123 agreement and the NSG waiver to India.
Sunday, August 7, 2011
Intelligence reform - finally something substantive
In the ruckus over corruption and general policy paralysis in government, a redeeming piece of news has largely gone unnoticed (and un-analysed). Manish Tewari, the otherwise insufferable spokesman of the Congress, has piloted a private member's Bill to (finally) initiate structural reforms of some sort on Indian intelligence.
The INTELLIGENCE SERVICES (POWERS AND REGULATION) BILL is an attempt to define the powers, appointments, jurisdictions and above all, oversight of intelligence agencies in India.
Bizarre as it may sound, not one intelligence agency in India today has a legislative framework notifying their work in general. All of them have been setup through executive notifications and work on completely ad hoc terms of reference. Ergo, each government has used (and misused) the intelligence apparatus as it deemed appropriate.
The mandate of the "oldest" agency, the Intelligence Bureau (IB) did not change significantly from its colonial avatar of Indian Political Intelligence (IPI), even as threats to the state morphed. Going after opposition politicians, conducting opinion polls, tapping phones and communications of politicians (on both sides) and bureaucrats - these have remained a big, some say the biggest, mandate of IB.
The decay in the capabilities of RAW, which once was the cornerstone of India's finest foreign policy achievement (1971, Bangladesh), is another case in point. While Indira Gandhi gave it a high pedestal in policy-making, Morarji Desai was openly hostile. Structurally, the bigger decay started when the Vajpayee PMO created the NSA's office as the de facto intel czar. RN Kao publicly protested, but to no avail. This got further institutionalised in UPAI, when MK Narayanan, first as Internal Security Advisor and then as NSA, became the superboss of all intel agencies (including IB, thanks to a colourless Shivraj Patil).
Above all, India remains the only country in the civilised world where intelligence agencies are not subject to Parliamentary oversight. A glaring error of commission on our approach to national security. And scams in RAW and NTRO are begging to be out in the limelight.
The new Bill tries to rectify some of the structural flaws.
First, it creates a clear reporting structure - RAW, IB and NTRO report directly to the PM. This is how it should happen, multiplicity of authorities create confusion and dilutes resources.
Second, it creates a high powered Parliamentary oversight body, the National Intelligence and Security Oversight Committee.
Third, it documents and bestows "police" powers to the three agencies. Today, none of the three can legally arrest anyone.
There are lots of missing gaps in the Bill - there is no structure of financial oversight of the agencies, it misses out key structures -SFF for example (which is an armed unit reporting to the Cabinet Secretariat) and so on. But as a start, its sorely needed. As of yesterday.
The INTELLIGENCE SERVICES (POWERS AND REGULATION) BILL is an attempt to define the powers, appointments, jurisdictions and above all, oversight of intelligence agencies in India.
Bizarre as it may sound, not one intelligence agency in India today has a legislative framework notifying their work in general. All of them have been setup through executive notifications and work on completely ad hoc terms of reference. Ergo, each government has used (and misused) the intelligence apparatus as it deemed appropriate.
The mandate of the "oldest" agency, the Intelligence Bureau (IB) did not change significantly from its colonial avatar of Indian Political Intelligence (IPI), even as threats to the state morphed. Going after opposition politicians, conducting opinion polls, tapping phones and communications of politicians (on both sides) and bureaucrats - these have remained a big, some say the biggest, mandate of IB.
The decay in the capabilities of RAW, which once was the cornerstone of India's finest foreign policy achievement (1971, Bangladesh), is another case in point. While Indira Gandhi gave it a high pedestal in policy-making, Morarji Desai was openly hostile. Structurally, the bigger decay started when the Vajpayee PMO created the NSA's office as the de facto intel czar. RN Kao publicly protested, but to no avail. This got further institutionalised in UPAI, when MK Narayanan, first as Internal Security Advisor and then as NSA, became the superboss of all intel agencies (including IB, thanks to a colourless Shivraj Patil).
Above all, India remains the only country in the civilised world where intelligence agencies are not subject to Parliamentary oversight. A glaring error of commission on our approach to national security. And scams in RAW and NTRO are begging to be out in the limelight.
The new Bill tries to rectify some of the structural flaws.
First, it creates a clear reporting structure - RAW, IB and NTRO report directly to the PM. This is how it should happen, multiplicity of authorities create confusion and dilutes resources.
Second, it creates a high powered Parliamentary oversight body, the National Intelligence and Security Oversight Committee.
Third, it documents and bestows "police" powers to the three agencies. Today, none of the three can legally arrest anyone.
There are lots of missing gaps in the Bill - there is no structure of financial oversight of the agencies, it misses out key structures -SFF for example (which is an armed unit reporting to the Cabinet Secretariat) and so on. But as a start, its sorely needed. As of yesterday.
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