Is right wrong? A dilemma for Mr. Modi

The word Hindu traces its origin to 'Sindhu' referring to the tradition and the civilisation that flourished around Indus valley. Indus also originates from Sindhu as does word India. One among the world's oldest traditions  the Indian tradition is seen by serious scholars as a quest for perfecting human being explained beautifully by late professor Troy Wilson Organ in his book The Hindu Quest for the Perfection of Man. But many peddlers of Hinduism are not really interested in that spiritual quest occupied as they are with shallow and misguided notion of religion. It is not uncommon that a people value form over substance. Human choices are not always rational. The marketers have proven and made money out of creating and catering to human 'wants' rather than needs. What else would otherwise explain the monetary value of poison called cigarettes.  In most rich countries where tap water is perfectly drinkable the bottled plain water is sold at a higher price than price of milk and price higher than that of chemical and gas compounds called cola. Hindi cinema producers are equally conscious of the commercial opportunity to entertain around religious ambiguities created by confusing religion with rituals and customs. Movies like PK and Oh My God are partly artistic critiques of non-critical acceptance of 'religious authorities' and partly commercial opportunism.

It is difficult to translate Sanskrit word 'dharma', it is not same as religion. The root of the word is from 'dhr' which is also found in 'dharti' meaning earth. It refers to something that gives stability, support or nurtures. In addressing the question, " is Hinduism religion?", T.W. Organ eloquently puts, "the answer to this question depends on what one means by religion. Religion in any culture is an expression of dissatisfaction with life as man finds it and of longing for better things. It is lover's quarrel with life, a grumbling about the status quo accompanied by a search for promised land. If men were satisfied with their earthly existence, religion would never have been created." Organ, 1994, p.12.

The scope of religious quest is far more than search for good living according to Organ, "religion, like ethics, seeks the good, like art, seeks the beautiful, and, like science, seeks the true. But religion is not satisfied with the goodness of ethics, nor with the beauty of art, nor with the truth of science. It seeks a goodness, a beauty and a truth transcending the noblest achievements of moralists, artists, and scientists. In the promised land is goodness better than moral goods, beauty more beautiful than artistic creations, and truth truer than scientific truths. This claim can be made only if religion contacts a reality more real than the realities of ethics, art and science. And this is the claim of religion. Religion asserts that it places man in relationship to Ultimate Reality, the Reality which is the source of all realities and the criterion of all values." Organ, 1994, p.14

Human kind wants to understand the reality that transcends material phenomena, the pains and pleasures of human relation with other humans, creatures and life at large. This is what drives the human search which perhaps prompted Organ to write,"Man is homo philosophicus, the being ever in quest of understanding of his world and himself. If man has an essence, it is the activity of questing for understanding. He is philosophising incarnate." Humans are curious beings and this curiosity is as old as human kind has lived on this planet although claims to this effect can be made with certainty only as far as human history records would allow. To quote Organ again, "we do not know why but we do know that the Babylonians were obsessed with attempts to predict the future by the study of the heavenly bodies, the Egyptians and Taoists with efforts to conquer death, the Hebrews with the search for moral law, and the Greeks with the creation of beauty." And this is what he wrote about Hindu civilisation, "Hindu civilisation has been, and is, in quest of reality. 'What is the real which if known will make all things known?' has been one of the fundamental quests of the Hindus. Furthermore, the search has been directed not to the starry heavens but to the inner world of the human spirit."  Organ, 1994, p.37. 'What is the real which if known will make all things known?'  refers to the question which is raised in the third verse in Mandukaya Upanishad where a household enquirer Shaunaka asks this question to Angiras.

The right wing Hindus organisations like RSS and Hindujagruti Samiti refer to one meaning of 'dharma' as 'righteousness'. The proponents of reconverting Muslims and Christians back to Hinduism do not explain what are they trying to do?  What is expected of a person converted to Hinduism? Hinduism is not a religion, in its conventional meaning,  which requires belief in a God or God's son and requires following a given holy scripture or a book. It is a comprehensive quest to know reality.  A more fundamental question is who has given right to anyone to expect someone to live a life in a way that they may categorise as life of a Hindu, Muslim, Christian or any religion, whatever the converters or re-converters mean by their propounded religion?

In Vishnupuran, one of the Hindu epics, there is a verse that reads in Sanskrit as 'Sa Vidya Ya Vimuktaye' meaning 'that which liberates is knowledge' (Part 1, Ch.19, shloka 41). What is that liberty that knowledge is supposed to enable? Is it the liberty from orthodoxy? Is it the liberty that helps find the true nature of human existence or the existence in general? Is it liberty to believe or not to believe in God? Is it liberty to find the infinite ways in which truth may be discovered? Is it liberty to realise that there may not be just one way to truth even though truth may just be one. Within Indian tradition itself Sri Ramkrishna Paramhinsa demonstrated to those who would believe, that ultimate reality could be realised by practising Islamic, Christian and Hindu ethos. 

The current Prime Minister Narendra Modi refers to works of Swami Vivekananda as his inspiration. Swami Vivekananda is considered supreme disciple of Sri Ramakrishna Paramhans and foundeded Ramkrishna  Mission in 1896. The Mission has this as one of its objectives: "To spread the idea of harmony of religions based on Sri Ramakrishna's experience that all religions lead to the realization of the same Reality known by different names in different religions. The Mission honours and reveres the founders of all world religions such as Buddha, Christ and Mohammed" (Belur Math).  Mr. Modi's opening remarks in his speech to United Nations mentioned India's tradition and philosophy guided by a verse from Mahopanishad Vasudhaiva Kutumbakam (world is one family), " India’s ancient wisdom sees the world as one family, and when I say this, I wish to make it clear that each country has its philosophy. I am not talking about ideology. With the inspiration of that philosophy, a country marches ahead. India is a country that since its Vedic times, has been saying that the world, the entire globe, is a family. India is a country where, beyond nature, we have a communication, a dialogue, with nature." (Read full speech here UN Speech, 27 September 2014, p.15, and listen to it on Toutube below). Actually the full verse that Mr. Modi quoted vasudhaiva kutumbakam from reads as following

ayam bandhurayam neti ganana laghuchetasam | 

udaracharitanam tu vasudhaiva kutumbakam||

 (Mahopanishad, VI.71)

The verse means, Only small men discriminate saying: One is a relative; the other is a stranger. For those who live magnanimously, the entire world constitutes but a family'. 

Indian Prime Minister Mr. Narendra Modi, Speaking at United Nations, 27 September 2014.

In the same speech Mr. Modi advised the UN to make UN Security council more  democratic and participative. He said, " Institutions that reflect the imperatives of the twentieth century will not be effective in the twenty-first century. They face the risk of irrelevance. I would like to emphasize that the policies and rules we made in the twentieth century may no longer be applicable. The speed of change is very fast. It is therefore essential that, in tune with the times, we adapt and reformulate, making the necessary changes and introducing new ideas. Only when we have done that will we be relevant."  (Modi, UN Speech p.17).

May one take liberty to extend Mr. Modi's recognition of the 'speed of change' and need to 'adapt and reformulate' to the religious discourse in twenty first century India to keep it relevant. This is Mr. Modi's biggest dilemma. Will he take India forward in twenty first century or will he let its march be slowed down or derailed by his mentors and alma mater RSS? The Indian voters who voted for him in May 2014 with development and good governance agenda as his promised priorities will be watching with anxiety and hope. 

Reference: Organ, T.W. (1994) The Hindu Quest for the Perfection of Man, Munshiram Manoharlal Publishers Pvt. Ltd., Ne Delhi. First Indian Edition. The book was published in 1970 in the US.

Time to decommission the planning commission in India

Doubt opens doors to alternative possibilities that certainty closes. “If today we have shortage of doctors, teachers and civil engineers, it is not due to an excess of planning, but to its deficiency”, thus concludes Sudha Pillai  a former member secretary of the Planning Commission of India in her opinion piece in Indian Express on 6/12/2014. This faith in planning even in the face of self confessed empirical evidence that India has shortage of appropriate human capital in economic, social, technical and scientific fields is the fatal conceit that Friederich Von Hayek warned about in his last book Fatal Conceit: The Errors of Socialism published in 1988.

Set up in 1950 and modelled on the erstwhile Soviet Union planning system, the Indian planning commission has been perhaps the most expensive institutional experiment. This is not because of the explicit cost of running the institution itself, which is quantifiable, but because of the implicit loss of the wealth that could have been created and human wellbeing enhanced by its absence. The evidence to support this assertion is observable indirectly and directly. The license-raj and the regulatory constraints that shackled the business and industry in India owe their intellectual debt to the views of the planners who thought they could calculate exactly that India needed a certain quantities of automobiles, certain amount of steel and cement and so on. The edifice of command and control economy was built on intellectual foundation of socialist ideas that planning commission provided structure for.

Growing up in India when the supply lines of most products were choked by regulation I remember how much premium one had to pay for just the allotment letter of Bajaj scooter. There weren’t many scooter manufacturers as the wise planners had quantified the potential demand for scooters and accordingly granted license for the capacity to meet that demand. Millions of contemporary youth who are lured today through enticing TV and print commercials by suppliers of two wheelers may be surprised to know that one had to deposit INR.500 to book a Bajaj scooter and wait for the lucky draw. People would fill in dozens of firms to maximise chance of getting allotment numbers that could be due for allotment. The lucky ones would then sell those allotment letters for a premium which also necessitated bribes to registrars of vehicles who would have to record the change of name after the delivery. The postman (I think it is still postman only in India, haven’t seen post women who deliver post but would request correction if I am wrong), when delivering the allotment letters waited eagerly while the receiver opened the allotment letter in excitement. If the allotment letter indicated early delivery date of the vehicle the postman expected a tip (bakshish) for delivering the good news! Indeed it was years later when I started teaching finance and options contract to students of MBA that I would realise that the value of the premium on allotment letters was nothing but what is technically called option price.

So what was the implicit loss of government controlling the supply of scooters, cement, steel and so on. An obvious loss was deadweight loss that results from monopolistic or oligopolistic competition which the planned regulation imposed on Indian consumers in many sectors. The deposit paid for scooter booking could have been used by depositors in more productive investments. The jobs and the associated wealth that could have been created by allowing producers to expand their capacities was implicit loss to India. This evidence may be shot down as anecdotal. One way to counter that argument would be to look at the number of jobs that have been created by the two wheeler industry since late 1980s, yes before 1991, when embryonic steps were taken to deregulate industrial capacity planning by Rajiv Gandhi’s government. Add to that the jobs created in cement, steel, pharmaceutical, automobiles, airlines, and other industries that have been freed from license permit and quota raj since then. That would be direct evidence of what non-planned economic landscape can deliver. Still unconvinced champions of planning can look up this 2014 academic paper by Radhicka Kapoor Creating Jobs in India’s Organised Manufacturing Sectors, published as working paper by the think tank ICRIER. This is just one of many papers that can be referred.

Mention of the direct and indirect wealth destroying consequences of the planning for and intervention in the agricultural sector may be the most difficult to digest for many readers. The strongest popular perceptions may be weaker than a modest but reasoned argument. So let the argument be made. How wise would the advice to lioness would be to always hunt and feed her cub? A cub that grows without hunting skills will either starve to death or will be killed by pack of wolves. A farmer who is assured of fixed price for a standard crop of wheat bought from him at his farm by a state agency like Food Corporation of India has weak incentive to go out to markets, has weak incentive to find what market demand for his crop is, has weak incentive to find ways of improving the yield or to try out different crops. The subsidies, the minimum support price and the state dominated supply chain in agriculture support farmers in short term but deprive them of the knowledge in long term that they would have acquired by frequenting the markets, by trying to understand the demand patterns, by searching and experimenting with different crops, different technologies and different supply chains. This knowledge gap is the biggest implicit loss. Coupled with corruption induced explicit loss the consequences of excessive planned interventions in agriculture sector are monumental. Economics is not so much about the scarcity of resources (land/labour/capital) as text books teach. It’s more about information and knowledge generation and channels of exchange of that knowledge which breed opportunities and engender risk taking in expectation of rewards. Even neo-classical economics argues that the prices contain all the information to coordinate the production and the consumption in an economy. If it is so and the price is administered politically, the information content of such prices is not the will of consumers and producers but wily calculation of politicians.

Finally let me support the case for abolition of the planning commission with a constructive example. Consider the dramatic story of Indian information technology (IT) sector. The success of IT sector is an indirect piece of evidence that shows irrelevance of the planning commission. At the end of March 2014 the IT sector employed 3.1 million people making up around 24% of the total employment by organised private sector employment in India. How has this been made possible? One may put forward many explanations but what cannot be put forward as reason for growth of IT sector in India is the presence or the contribution of the planning commission or of any planning by the state institutions. Before the state institutions and bureaucrats could understand the possibilities of the explosive growth of internet and communications technologies the engines of growth had been fired. The IT enabled service providers like Infosys, TCS, Wipro and the like were global players. Provision of these services was less dependent on the water, electricity, roads and was relatively free, not be choice of government, from license permit raj. The sector grew away from the radar of the planners since the sector. It did not require massive resource allocation from the state. This allowed entrepreneurs and enterprising corporates to create wealth and jobs by taking advantage of the time zone dividend that India enjoys and by recruiting thousands of graduates in arts, commerce, computing many of them trained by thousands of small software and computer training institutes.

Some may argue that the IT sector growth was fuelled by supply of large number of English speaking, low cost engineers produced by Indian Institutes of Technology (IITs) and other sub-national institutes which were planned and funded by the government would need evidence to prove that the planning commission, the ministry of Human Resources Development and University Grants Commission consciously planned in 1980s to boost supply IT trained human capital in that would be needed in following decade. Such planning of human resources for an unknown or emerging sector is nearly impossible. The availability of the large number of English speakers actually provides evidence of anti-thesis of planning i.e., unintended consequences. No one imagined in 1970s and 1980s that command over a language would prove to be a key skill for India to emerge major supplier to this global service industry. Contrast this to situation where the state intervention was made. With increased demand for management and technology human resources Ministry of HRD responded by creating a licensing authority called All India Council of Technical Education (AICTE) in 1980s which like most other licensing authorities soon became another rent extracting bureaucratic machine. In the year 2009 the AICTE chief was jailed. He and other officials were investigated by the Central Bureau of Investigation on corruption charges in 2009.

The path to hell may be paved with good intentions. The corruption is illegitimate child of three potential parents. Regulation, licencing and inspections are three potential parents of the devilish child corruption, the child that has grown into a hydra headed monster in India. The ‘planning’ by planners is ideological grandparent of corruption. It is high time to commit the ideological grandparent of corruption to the uninspiring economic history of India that the planning commission has scripted since 1950.