Corruption the Cancer…

I like this term – frequently used by Arun Shourie. I was reading some of his articles published in the past and realised how systemic is corruption, that even people like him in power are unable to build a coalition to root it out..

I call this a systemic problem as I realise that no amount of good intentions or my simplified suggestion of improving the salary levels and hi-tech monitoring is going to solve it. Its a problem akin to famines, no matter how much food you could bring in India in those days, it didn’t solve the problem. But only when you brought in the structural changes did the famines vanish from Bengal.

So what are the fundamental problems and how to solve them. Like absence of rains and use of unscientific techniques caused famines… demand of food was more and less could be produced, i think corruption is caused by a big demand supply gap of governance in the form of schools, hospitals, police, prosecution, vigilance, and a lack of checkpoints – you always know the big fish will be the most corrupt, you create special deptt. to make sure they dont get out of the net.

I think the way to go about it is to try and remove the capacity issues. Staff government offices adequately – simply making the bureaucratic control reduntant and allowing market forces to come in, but regulated to ensure market functions properly. My wishlist is to increase number of districts as per population and local needs, use technology to make governance more open – involve people in scrutiny along with the vigilance department, make the decision making procedure less hierarchial – decentralise authority, focus on core issues of governance, economy and security and leave rest to well qualified professionals, and ofcourse pay good salary.

The Devil is in the Detail

Obama has been giving historic speeches since he set out to become the President. His speeches have been characterized by the scale of ambition he wants to achieve, the change he aspires to set in. At home, the euphoria generated by prospects of a stable government at the centre has led to enormous expectations from the government. True to the mandate, the Congress ministers are coming up with plans to undo the wrong doings of the past. To remove the bottle necks in public delivery, to ensure the rule of law, to put a sense of governance back amongst the nation.

I feel that this optimism asks for a caution to avoid over-simplification of things. To try and bring in changes not properly considered. To do away with the old structure without proper planning can be more harmful than maintaining the status quo.

Obama himself has been slow on the promised change. He has stopped short of executing a number of his prepoll commitments and have changed his stance on policy matters. I think the same would be happening here in India, when the ministers get down to work and realise competitive demands made by various sections, it will be a challenge to figure out their way out of this zero sum game.

I wish them all the wisdom and courage for doing the right thing.

Bypassing Media courtesy Twitter

It is fascinating to see how twitter has gained in popularity as a medium of communication. Its a powerful tool that unleashes the Yahoo chat room on mobile. People talk with each other through sms and discuss a topic or update about their daily experiences, encounters and thoughts.

A conversation starts flowing amongst friends on receiving information via sms from the website. Information on live and important events that are or are not covered by the media reach at the very instant in the consumer’s hand. The consumer doesn’t need to wait for getting access to a television or getting information via computer. I see this as another step of bringing information faster to relevant people. This will bring people closer to each other on a number of topics. Moreover, applications such as Twitter are much more a relevant tool for India as compared to web blogs due to a very high penetration of mobile phones.

Apart from the democratization of propaganda machinery another aspect that needs to be looked into is how mobile based internet applications are going to affect the traditional information media that is already feeling the blow of internet on their revenues.

Unlike western countries newspapers still enjoy high circulation in India. However, with the advent of 3G and applications like twitter which are providing real time, up-to-instant information on mobile the newspaper and tv media are now in danger zone. These channels will now need to be present on the internet with all their ammunition to be able to direct the users to their content and retain them with all the analysis. A faster and affordable wireless internet will make a lot more people will start reading the news articles and watch the videos on the internet. The companies must come up with a business model to monetise this. Asking for subscription on internet is not a cool thing and is likely to fail.

Anyways, it is interesting to see how innovation is breaking authority and bringing changes in market structures. Lets have 100 percent foreign direct investment in Indian media now… the race is going to heat up and we are in for changes that would need a lot of money…

Weeding out Corruption

India has been ranked as having one of the world’s worst bureaucracy and one of the most corrupt too. The new UPA government has also decided to improve the public delivery system and reform bureaucracy as a constituent of its core agenda. Considering that they made similar promises five years ago and have not been able to deliver on that front – it calls for an introspection on what are the causes and to understand what can be done.

I think the root of corruption is the pay inequality between an officer of the Indian government and the people whom they are supposed to govern. Lets take the example of the Income Tax Department. If you do not pay officers a good amount of money they are likely to feel bitter, when they realise that their own conditions of life are average as compared to their assesses who time and again exploit loop holes in laws to unethical legal transactions to save money. Their status of living doesn’t match up to the powers vested in them. I think it is a bit of feeling cheated and jealousy that cause corruption. I am a firm believer that people do not get bitter at their own bad conditions, but at the good conditions of others.

Another reason for corruption is lack of swift prosecution and judicial mediation in disputes. Successive governments in India have been undermining the authority of institutions to use them for personal gains. It is a relic of the socialism and scarce resource theory of Indira. It is imperative to bring judicial reforms in the country, to clear the backlog of cases and to make judges accountable for giving good quality judgements and not sitting on them. They have been given a leeway for a long long time. It is an institution for the service of the public and must act to deliver it. It simply beats the logic that judges need good 2 months summer holidays every year, even when there is so much to be done.

Thirdly, implementation of IT system in day to day working of government, so that a lot of information is disclosed to the civilians. It is again ridiculous that we can track a shipment throughout the globe but not a file in government department. Moreover, the implementation of IT will automate a lot of clerical work and reduce hierarchy leading to accountability.

I think the beginning has been done by introducing the sixth pay commission and a blue print has been built by law minister. But still, i think the judicial reforms and strengthening of institutions will take a lot of time and political will. This is because the relevance of the people who are supposed to reform the institutions depend on making the institutions subservient to their wishes. I think the hope here is Rahul Gandhi who doesnt need on running down institutions to gather legitimacy in front of voters. It will be nice to see how institutions are built in these five years.

Applying scientific approach in day-to-day work

Over the last couple of weeks my inclination is increasing towards a scientific approach of doing things. I am especially excited about using a planned or process based approach at my work. I may call this a scientific approach as science is all about using a process or methodology to arrive at logical conclusions.

The trigger has been multiple , although not in the same order or priority – the great Indian elections, the commencement of IPL season, the mismanagement of bureaucracy at cyclone Aila, the incumbent recession providing tremendous opportunities for change, and my own feelings of not giving an adequate shot at a number of opportunities. The messages I took out from these different triggers overlapped into a decisive conclusion that success and failure are differentiated by following a scientific approach involving planning and preparedness.

The victory of Congress aside, Indian elections are an exercise in minute planning and steadfast execution. All the parties plan the caste equations, vote bank appeal, street fights, and coalitions at block level to win a particular seat. The IPL teams win matches by planning the response at every ball as a solitary dot ball can swing matches. The failure of bureaucracy at Aila is shameful – ignoring the victims and setting up relief centres where they cannot be accessed – is not successful by any means.

After a little bit of introspection, I intuitively found out that I have a very unstructured and un-planned way of doing things. I take up things as they come up and rarely plan or follow up on the tasks already on my plate. Looking around, I believe it is more of a desi way of doing things. I do not see application of planning based approach at work or among my friends. It is in stark contrast to my friends in Europe who are excellent in this aspect and thus are able to get a lot more things done while maintaining a healthy work life balance. It might be to do with the kind of our rote based education system rather than application based system. However, I think the root cause is ignorance.

Apart from planning, there should be a process to execute a plan. Roles need to be assigned to various resources in the plan and a clear benchmark must be set for the resources to acheive.

However, one of the biggest flaw of the process is that its application is restricted on human resources. There is a high chance that a human resource will resist something that is not planned by him and is thrusted upon by someone in the hierarchy. Moreover, if a resource is performing a particular task in the plan repeatedly, he might lose interest in the task failing the purpose of plan to achieve efficiency. Thus, it is imperative that the plan should be tailor made to the capabilities and aspirations of the constituents. I have myself seen many instances of failure where this is not kept in mind.

Getting on to do a task with out a plan is bound to be a failure.

A word of caution: following a planned approach is different from following a theoretical approach to doing things. I think there is a healthy disdain of following a text book approach to solving problems. Theoretical approach a number of times involves a lot of effort and is a bit away from reality.

The Second Stimulus Will Fail

The second Indian stimulus package will fail to revive the economy. The government has eased credit in the infrastructure sector and consumer market, provided some duty reliefs and tried to relieve the pains of the realty sector by allowing them ECBs. This will no doubt increase liquidity in the market and provide a short term relief to certain sectors but it will not lead to broad based recovery of the indian consumption. The government should realise that consumers only spend when they have a confidence that they will keep on earning and will be able to pay their debts in short as well as long term.

The direction of package is wrong especially because the pain point in Indian crisis has not been lack of money to spend, but, the willingness to spend. The electronic media has amplified the fears of slow down to such a level that people are just cutting down on spending fearing a job loss. It is leading to a spiral effect where consumption has gone down forcing manufacturers to cut back expenditures and eventually jobs. Thus, the problem will not be solved by giving people more money to spend or make the stuff cheaper as there will always be a doubt that it might suddenly run out as it was introduced. The problem will be solved by making broad based reforms to boost confidence in the Indian story, governance and economy.

The Indian government should have sensed the mood of the nation and tried to prop up the confidence by offering package that would have appealed to the heart and the head. The government could have created a special vehicle to focus on improving the infrastructure in the country and in devising processes to increase access to the new infrastructure. Spending on building infrastructure would have not only created new jobs, but also sent a signal that the government is interested in growth and they are going to take advantage of the slowdown to build infrastructure to fuel long term growth. This signal would have reinforced confidence in the Indian story and investors would stay put in the country, thus, providing a much needed psychological cushion to the consumer market.

Secondly, the government should have spent substantially on recruitment and modernisation of security personnel and revamping of judiciary . The recent mumbai attacks would have allowed the government to take such a step and restore the confidence in governance. Another step that the government could have taken would have been to launch e-governance in the country. E-governance should have been introduced at every level the citizen interacts with government institutions. This would have sent the signal that the government is trying to reduce corruption and give a power to the citizens to make the bureaucrats accountable.

Thirdly, the Indian government should have taken the opportunity to start investing in clean energy sources. With all the world attention on climate change and the commitment of US administration to spend on clean energy the government should have started a mechanism to allow the Indian industry cash in on the emerging next bubble. China has taken a lead in the manufacturing sector already. The government could have earned a lot of money by creating carbon credits and trading them for a profit. Inspite of it, there is a huge market in India itself, which if we dont capture, will be served by others.

I really feel that the government is far away from the concerns and the need of the time and the people. If something could be done…