Wednesday, July 17, 2019

Random Thoughts -1

Our MPs and MLAs by definition are elected by us and empowered to rule us. However, most of these personages are chosen (winnability), projected, supported and FUNDED by Political Party. 

The Political parties are controlled by its leadership, coterie, dynasty or kitchen cabinet: call it what you will. The party leadership expects these worthies to ensure that its will prevails, by use of Strength of Numbers.

The Party Leadership uses “whip” to keep the flock together, much like the sheep: leave their brains and sensibilities at the door before entering the august houses.

Only your throat is needed inside 

Saturday, June 29, 2019

GDP Growth Rate – The Great Indian Debate

GDP Growth Rate – The Great Indian Debate 
Much like the Panchtantra parable of “Elephant and the blind men” this debate is dominated by ‘smell & feel” of the Indian Economy.    
Arvind Subramanian, the former Chief Economic Advisor had stated in 2015, that the new GDP series with the base year 2011-12 did not ‘smell and feel” right. So did many other learned men and women.  Most other “data’ about the level and economic activity and outcomes were out of whack, they “felt”. 

Arvind retired to the academia in Sept 2018, and had time to work on this ‘irritant’ He worked with the ‘volume” of production of 17 products and services in India; conflated them to arrive a ‘trend line’. He diligently confirmed his hypotheses using data from 70 other countries. He was then happy to reconfirm that Indian New GDP Series did not “Smell & Feel” right.

Nothing, that is new here.   
His paper published by Harvard University, actually stated that “India’s actual GDP growth rates may have been about 4.5% only with a 95% confidence interval of 3.5 - 5.5%, during the years 2011-2017 (the New back-series)”.

But he made an explosive (incendiary) statement that the GDP likely ambled along at an elephant like @4.5% and not sprinted at tigerish @7.5% as claimed by GoI. Arvind’s is a credible voice, being the erstwhile CEA, and divergence from official positions is large enough for the GoI ‘warriors’ to come out guns blazing.
4.5% was picked up by the TV studios and many swords were unsheathed.

The Chronology of the GDP Controversy
Nov 15- March 2016:  GDP Growth data was released after changing the Base Year to 2011-12 (earlier 2004-05) and with improvements in methodology. The back series issued to ensure fair comparison showed that GDP growth in the UPA years better than NDA years.  
P. Chidambaram gloated that “the 10 years of the UPA government recorded the highest decadal growth since Independence” and “… It should put an end, once and for all time, to the misconceived charge that the UPA government had mismanaged the economy.”
Now that commentary does not gel with the “Congress Mukt” narrative being built so strenuously by NDA.
April 2017 – Sudipto Mundle Committee was set up to improve the “Real Sector Statistics and databases”. The Report was published by MoSPI in August 2018. Back series from 1994-95 was now reported using another set of databases (with 2011-12 the current base year). 
This report reconfirmed that the average growth under the two UPA terms turning out higher than that under NDA-1. The government, promptly to disowned the data by stating that the Mundle methodology was ‘experimental’ and not yet ‘finalised’. And the Report vanished from the MoSPI site.
July 2018 : MoSPI announced change of Base Year yet again to 2017-18. 
Jan 2019:  MoSPI raised the GDP estimate for Fiscal 2017 – to 8.2% without giving out or presenting any credible methodology. As usual it was assumed that the Informal Manufacturing Sector,(which was severely battered by DeMo tsunami),  grew at the same rate as the formal sectors !
There was peace at last, as NDA and Modinomics has won! Just before the general elections. 

But now Arvind Subramanian has gone and stirred the hornets’ nest again.

The Politics of GDP         
While Consumers and Producers make most of the decisions that mold the economy, the Government activities have a powerful effect on Economy –“the playing field”- mainly thru Fiscal and monetary policies.
Politics is inherent to policy-making. It is natural that every dispensation will “tom-tom” the superiority of its policies: much like “my daddy is greatest”. And the politicians do spin data in a positive light or manipulate it such that everything appears rosy.

A few Remarks
GDP Measures, devised by Nobel Laureate Simon Kutznets as a measure of “economic progress” is past its “sell by” date, as the structure of economies the world over has changed beyond recognition since 1940’s.
 Arun Shourie made a very telling distinction between India and Bharat, when he said that the DeMo and its attendant “formalization” delights Bombay and Delhi but the lights have dimmed in Ludhiana, Moradabad and Tirupur.  
Increasingly our Governance systems and structures, Centre and States have strayed from their primary tasks: 1). Security of Life and Property, 2). Capacity building for Education and Health, 3). Physical infrastructure and lastly, 4) Creating a “level playing field” for all economic and social (actors) entities.
Is the GoI in danger of becoming a “ruler” that runs a ‘protection racket” as Yuval Noah Harari characterized “most rulers in history”?    

Saturday, May 18, 2019

Smart Cities - Fundamental Parameters

The report by Nidhi Sharma (ET, 21st Mar 2019) on indifferent results of 3-year old smart -city (NDMC) initiatives caused concern. Our planners seem to be missing something very basic, that a smart city components can only rest on "Smart Physicals"

We need to do a 360 ยบ review of vastly changed external realities to those that informed the current assumptions and parameters that guide our Urban/Human Habitat planning norms. Exploding population caged in finite land masses is now causing "frictions" that are becoming "unbearable", in most cases. 

It is no-brainer that we need to grow "vertically" -shrinking the cities horizontally.

Designate and notify areas with MIN (NOT Max, as we do now) FAR/BCR areas, facilitating 50 Story + multi-use Complexes, that house many activities reducing the need and frequency of stepping out.
*(No Govt building be less than 50 floors – Govts, both state and centre get rental income)
*(No housing permit to increase floors on houses - encourage plot pooling -to build 50 story mixed use complexes)   
*( Rules like 50% plot coverage need to be modified so that even basements do not cover more than 60% of plot Area, against almost 100% now).   

Secondly, we need to smartly manage our refuse, waste and garbage: start with Corporates (SPV) responsible for designated areas, for planned Automotive, electronic waste and garbage (recycle, use and dispose). 

 Thirdly, to regulate movements create -large low cost steel structures for parking (herring-bone)(Mixed use), with kiosks for hawkers and rehri -walas,  (rented @Rs100/day) restaurants eateries and (dhabas etc also) on different floors -roof top gyms and pubs, creches and kids play areas).
Clears up and de-clog road surfaces for faster commutes.    

Fourth, as we vacate lands, create parks and ground water re-charging systems revive water channels (to reduce flooding) 

In thirty years (It is definitely a generational shift), we will have better human habitats, with better air and water quality.