Punjab’s Resource Curse

October 11, 2017

A resource curse is when a place that has abundant supplies of natural resources (usually crude oil) ends up worse because of it. The concept explains, for example, why:

  • Saudi Arabia, which has so much crude oil, is nevertheless such a horrible place for human rights
  • The Democratic Republic of Congo, which is a supplier of all the rare minerals that go into our cellphones, is torn apart by civil war
  • Jharkhand and Chhatisgarh, which produce so much of India’s coal and iron ore, are miserably poor and underdeveloped compared to places which only buy up the power and steel products

Less extreme and gruesome examples of the resource curse include Dutch Disease, in which having lots of natural resource exports makes all your other industries less competitive. So even though the Netherlands didn’t descend into poverty or dictatorship after the discovery of natural gas, the rest of their economy suffered.

Although the Netherlands (and Norway!) managed to stay intact as democracies1, having lots of natural resources certainly does seem to make you more susceptible to dictatorship or authoritarianism, or at least make it harder to build democracy and the rule of law. This EconTalk episode, in which Leif Wenar talks about refusing to trade oil with dictatorial regimes is an interesting discussion on that. (For what it’s worth, I found it highly worth hearing, but it left me unconvinced because it didn’t really address the issue of oil and other commodities being very fungible in trade. But still very intriguing; and the bits about how to use resource revenues for the community or nation rather than to enrich dictators has interesting tie ins with the work of Elinor Ostrom2, which I am also reading these days.)

After hearing the episode and ruminating on it for a while, I had a moment of insight. That insight was this: Punjab has a resource curse too. The resource in question is fresh water.

My narrative goes something like this: for centuries, the five rivers (plus the Indus) in the Punjab made it a little more fertile than, say, the Ganga-Jamuna Doab or the Cauvery delta. But in the 1950s and 1960s, the Green Revolution was to Punjab what the invention of the oil well was to Texas or Arabia. The introduction of thirsty and productive hybrid varieties of wheat and rice meant that suddenly the abundant water resources, instead of being left to flow, were being rapidly converted into foodgrains3.

As irrigation, electrification and groundwater pumping stepped up, so did foodgrain production (though productivity eventually stagnated). Simultaneously, the slow decline of manufacturing began. And in the 1980s and 1990s, the freshwater resource curse became as bad in Punjab as the petroleum resource curse became for Arabian states, playing out in:

  • Khalistani separatism and terrorism
  • Police retaliation and brutality
  • The steady consolidation of the Badal family over the Shiromani Akali Dal

Meanwhile, as the state itself went bankrupt, and the power company even more so, manufacturing became practically unviable (being so far inland from a decent port doesn’t help either); and the drug abuse epidemic took off. And here Punjab is today, where manufacturing is unviable, agriculture itself is looking unsustainable after years of pumping groundwater and growing rice has left the soil waterlogged and unsuitable for cultivation, people across the state are drug addicts, and the best option for anybody with ambition is to migrate to Canada or Italy4. What a mess.


The Ideal Buyer for Air India

July 4, 2017

Apparently the Indian government has finally decided that selling Air India is an option. I am not super confident that anything will come of it. For starters, right now there is only a cabinet resolution; which gives them a lot of wiggle room to back out of it later on. The working group, not yet constituted, could come up with impossible sale conditions. Parliament might scupper privatisation. Union politics might make the government do a hasty U-turn.

Also, as someone whose cynicism with regards to Arun Jaitley grows every month, the fact that the original announcement was made by him, makes me even more doubtful that anything will ever happen. The man seems to be trotted out every so often on to television to make the BJP palatable to liberals, and then nothing actually happens. Do you remember how:

  • before the Lok Sabha elections, he said that of course Parliament could legislatively repeal Section 377? Then when Shashi Tharoor brought in his private member’s bill, the BJP voted against it.
  • two budgets ago, he said that starting the next year, he would cut corporate tax rates by a percentage point every year? I’m still waiting.
  • he decided to not legislatively bar retrospective taxation, after all that sound and fury, instead just promising that he would never do it?

So when Jaitley says that selling Air India is a desirable objective, I for one suspect that this is just a new round of talk before meeting with funders, and actual action will be short on the ground. Of course, this assumes that anybody actually wants to buy Air India, which is a bit of an ask. So far, we have had the fun spectacle of seeing Anand Mahindra saying he isn’t brave enough to take it on, and its shareholders panicking at the thought that Indigo might be.

Which is the biggest problem, really. Even assuming that Bharat sarkar is sincere in wanting to sell Air India, and not just making suitable noises; and that union opposition is overcome, then what? Nobody who was accountable to shareholders, or had any sense, would buy it.

That doesn’t mean that nobody would buy it. There are people who aren’t accountable to shareholders, or who can defy them, and who don’t have sense. Ratan Tata, the past few years have shown us, comes close to that happy situation. But even he is surpassed by a certain class of dilettante airline operators. I speak, of course, of Arab sheikhs.

In the past few years, the Middle Eastern airlines have recklessly and cheerfully expanded. They run half empty flights to the United States, introduce new and unprofitable sectors just for the prestige of running ‘the longest flight in the world’, and are engaged in an arms race when it comes to just how ridiculously luxurious they can make their first class product. Alas, as oil prices have fallen, some cost cutting has started taking place, and maybe even the Middle East 3 won’t be brave or foolhardy enough to buy Air India. Emirates or Qatar Airways might just buy Air India to replicate the Etihad – Jet model and run shuttle services to Dubai or Doha as applicable, but I wouldn’t count on it.

Though the ideal buyer for Air India, in my opinion, isn’t Emirates or Qatar. It’s Saudia – the national airline of Saudi Arabia.

Why, you ask? This is not because I am a fan of Saudia (I have never even travelled on it) and feel that nothing would improve Air India flights like a no-liquor policy. It is more that I feel that the greatest contribution the government of India could make to world peace is to saddle Saudi Arabia with an airline that haemorrhages money every year, will give its owners severe grief when it comes to human resources issues, and pit the irresistible force of Ravindra Gaikwad against the immovable object that is the Ministry for the Prevention of Vice and Promotion of Virtue. Every riyal Saudi Arabia spends on keeping Air India aloft, will be a riyal they are not spending on setting up radical mosques or bombing Yemen or doing the dirty on Iran.

Maybe the way to get this to happen is to get Qatar Airways to express interest. And then Saudi Arabia would try to buy Air India instead, out of pure spite for Qatar. After which, we could try to add on persuasion by suggesting that running Air India would be the ideal way for one of the surplus princes to occupy himself.

One can dream.

Residence Proof

January 30, 2014

In recent weeks, at the Khanna family breakfast table, we have increasingly been discussing the desirability of breaking our house down and rebuilding it.

This is actually something we have been doing for the past ten years. It happens in cycles. Every now and then, we go through the summer exasperated at how much we’re spending on water; or through the monsoon exasperated at how much our pipes leak, or through the winter moaning about the lack of insulation or central heating. (The last, admittedly, is more a point of exasperation for me than for the rest of the family.) We resolve to knock the damn pile over and rebuild it from scratch in a way that will stop all our whining. Then one of two things happens.

Either we fall into a financial crisis as a family and shelve the idea of reconstruction for better days, or we call the architects with great enthusiasm. And once the architects are there to discuss what it is we want, we fight bitterly in front of the architects about what it is that we want, accuse each other of not listening, being idiots, or making preposterous demands, and generally leaving the architects gaping in amazement. Then we sulk, and drop the plan. Until the next time.

For despite this track record, we always come back to this idea. Particularly in the last few weeks, as I was saying. As a result of the enthusiasm for reconstruction waxing, my father was telling me and my brother at the breakfast table that there was a new advantage to staying in our current location (Safdarjung Enclave, that is) instead of moving out to rented accomodation elsewhere – that is, under Delhi’s new rules for admission to primary schools, our kids would have a super advantage in getting into DPS RK Puram, which came within the eight kilometre limit.

Unfortunately, as my brother pointed out, my father was mildly wrong in the details. DPS RK Puram does not have a primary school, only middle and senior schools. From nursery to Class V, a DPS student goes to either DPS Vasant Vihar or DPS East of Kailash.

Fortunately, Vasant Vihar manages to be within even the original six kilometre limit, but East of Kailash is a little iffy – Google Maps claims you can get there with a 7.9 Km route, but if you take outer ring road it’s ten kilometres. That makes me wonder how the eight kilometres are calculated, anyway. Is it by taking a compass and drawing a circle around the school, or by measuring driving distance?

It also made me think, at first, that rents in areas which were within six to eight kilometres of of multiple good schools would probably skyrocket. This is really bad news for anybody thinking of renting a flat in places like Safdarjung Enclave, or Green Park, or or such like.

I then also wondered how long residence actually had to last in such places. If all you had to do was be a resident for the duration of the kindergarten year, Safdarjung Enclave might turn into a vast neighbourhood of transient renters with five year olds, all moving in a month before school admission began, and then moving out a year later once their child got into Class 1, making way for a new round of families. For a while, my imagination turned to Vasant Vihar landlords evicting expats and diplomats, and rebuilding their homes as dharamshalas to house as many families with children, in as small a space, as possible.

Pleasing as that image was, I finally realised that this is India, and that nobody will bother with an actual change of residence, when all they have to do is somehow jugaad a proof of residence.

I predict Green Park and Vasant Vihar landlords will now start charging the posh buggers who live in Chhatarpur and Sainijk Farms a small fee to issue a rent agreement for the duration of such time as it takes to get an electricity bill or bank statement or suchlike and establish that they live in a place surrounded by good schools, while they actually go on living in their secluded mansions and sending the kids to school with a car and driver.

I will leave it to the reader to decide whether the best way to deal with this is strong regulations or a dharna by the Chief Minister.

Pixar Meets Percy Mistry

August 2, 2012
I saw Brave (the Pixar movie about the red haired Scottish princess) last month along with Anand. (We then ended up also putting wine based lunch and gourmet ice-cream so it turned into a man-date, but that’s another story.) So far, it’s been the best movie I’ve seen this year (admittedly, I’ve only seen five), even better than The Dark Knight Rises. As I tweeted, it managed to mix constitutional law, principle based regulation, feminism, little Gaulish village style punchups, Feegles, and good 3D.
The post that follows is mostly about everything Brave made me think about. Fair warning – there are spoilers ahead for not just Brave, but also a whole bunch of other princess-y movies, books and TV shows – Tangled, Goong, and The Princess Diaries. I’ll start with the feminism (which I’m not an expert in) and the Feegles and the punchups, and move on to the constitutional law and principle based regulation (which I’m also not an expert in, but which I get all obsessive-fanboyish over, so that’ll be far more detailed.)
One of the feminist criticisms of Love Aaj Kal was that the sardarni in the old time love story never spoke at all. (This is in addition to the other feminist criticism of LAK that sardar-Saif is basically a stalker throughout his story, and the more general criticism that LAK was totallly WTF). Things are quite the opposite in Brave: the heroine does all the talking while the princes never say anything (giggling and sign language apart).
And on that note it’s kind of awww to see a Disney princess movie (okay, Pixar, but distributed by Disney) where the happy ending does not involve the princess getting married. To be honest, I had watched Tangled which does end with the princess getting married, and liked it. But as a certain bear told me in the context of The Princess Diaries (princesses again!) “I do like Mia, of course, but still. It’s the principle of the thing.” (Oddly enough, as we’ll see in a bit, Brave the movie is full of bears.)
One of the early scenes reminded me of the all-against-all punch ups from the Little Gaulish Village, except with Scottish people. That particular scene convinced me that I could trust Pixar to do a film adaptation of the Tiffany Aching and Nac Mac Feegle books. Crivens!
And now for the constitutional law and principles based regulation.
These days, I’m unable to read or watch most things with a monarchical setting without rolling my eyes and going “Bitchplz, if you had just adopted a constitution this shit wouldn’t be causing so much drama.” In this, I’ve been spoiled by The Princess Diaries (in which Lilly Moscovitz is anti-monarchical right from the beginning, there is that whole Principles of Government plot track in the early books, and then shit gets *real* in Books Nine and Ten, once Genovia goes from an absolute monarchy to a constitutional parliamentary monarchy. Even more than The Princess Diaries (in which I read the last few books only in April this year), my eyerolling at monarchy stories has been driven by Goong.
Goong, also known as Princess Hours, is a Korean drama stories which I was introduced to by Beatzo (who writes about it here). Quick synposis: it’s set in an alternate timeline where the Korean monarchy was never abolished, and so Korea still has a monarchy (no mention on whether it’s a unified Korea or not), but also a constitution. The Crown Prince has to be married off to preserve succession, and his grandfather’s will specifies that he marries one particular girl – who is a commoner, a klutz, and coincidentally, at the same school as the crown prince. So far this is just Cinderella meets Princess Diaries meets teenage love triangle – except things get further complicated with succession intrigues, and – this is the cool bit – constitutional crises, right from the beginning. It sounds kitschy (and it is! it is! when it comes to the costumes and the soundtrack), but it’s also written very cleverly, with lots of playing with the tropes of the Cinderella story, high school cliques, and so forth. My love for Goong is just as sincere as my love for the Princess Diaries (that is, completely fucking sincere). I really ought to blog about it separately, especially to take issue with Beatzo’s claim that all the characters are sympathetic. I dididentify with all the characters, but sympathising is a completely different issue – except for Min Hyo Rin the aspiring ballerina, they’re all kind of assholes. But yeah, different post. Back on track now, or at least to a digression that’s just one fork deep.
So, the fact that there are books and TV series that have monarchical settings but which manage to actually use constitutional law as important plot points instead of just ignoring it and its conflict with absolutism is a major reason why I get fed up with books with the same setting but where the alternative of rule of law (or at least rule by law) isn’t even on the radar screen. This is one of the reasons why I hated A Game of Thrones (the other reasons were that the damn thing meandered for more than four hundred pages without bringing any of the plot threads to a satisfactory conclusion, and that we got hints of a cool zombie plot in the introduction which was then cruelly set aside for almost the entire book).
I have a conspiracy theory, though, that George R R Martin is actually aware of this shortcoming, and has made this known through that bit in AGoT where one dude tells the other dude that all the characters are obsessed with playing the game of thrones, but none of the common people really cares who is on the throne. The whole point of A Game of Thrones, in this conspiracy theory, was to annoy the readers, or possibly the publishers. When they missed this blatant pointer that they shouldn’t really give a shit about any of the characters, GRRM decided to up the ante and screw with them even more by means of the insane delays between books. Basically, the entire A Song of Ice and Fire series is an elaborate troll.
OK, seriously, back on track now. Constitutional monarchies. Brave. Time to focus.
There are lots of issues here, but lets start with political legitimacy and the consent of the governed. We take it for granted today that governments derive their legitimacy from the consent of the people they govern – and that this consent is periodically refreshed through democratic elections (or, if you’re being cynical about it, by the people’s failure to revolt – but then, kicking out a government you no longer consent to by voting it out is a form of peaceful revolt.)
As with most stories about monarchs, the question of whether these monarchs have the consent of the governed or not is neatly ignored, but the theme is touched upon in another way: by the fact that the monarchs themselves are governed by tradition, custom, and “what a princess should do”. So, when Merida, the princess of the kingdom and the central character in Brave, is told to marry one of the three princes of the other kingdoms against her wishes, because that’s the tradition that binds the kingdoms together in peace, we see the clash play out. Instead of unjust laws for the commoners, we have unjust traditions for the rulers.
(The situation of absolute monarchs being miserable because of unjust traditions, while likely ruling their subjects with wholly unjust laws, does have a lot of eyerolling and “Cry me a river” potential. But if you’re going to address this issue, this is probably an easier and more dramatic way of telling the story.)
So although Brave doesn’t actually have constitutions and laws anywhere in the plot, it does, through allegory, raise issues of constitutional law. In a constitutional state, where you’re governed by laws, do the laws have the consent of the governed? And in a pre-constitutional state, where you’re governed by traditions (which could be purely religious, cultural, or a difficult-to-separate complex of religious and cultural), are the people carrying out those traditions doing so with full consent as well? This, I feel, is a question applicable to India even today – we’re not so much a single nation as a patchwork or network of nations, some of which are governed by law, some by tradition, some by charisma, and some by a combination.
A specific example is the khap panchayats of Haryana and Western UP (Jatistan, in other words), which are the governmental structure of the (virtual?) state that governs by tradition. And when two same-gotra kids decide to marry, they’re no longer consenting to the traditions that have been governing their communities up until then. Boom. Suddenly the consent of the governed has vanished. The trouble is, the people running the government are going to treat it as a rebellion. Which means that your choice is to secede, and run away to a part of India where the government is by law and not tradition (but I doubt that any place in India is completely like this), or to actually rebel and take the tradition-government down. That needn’t mean attacking a panchayat full of Jat geezers with a hand-pump Sunny Deol style, pleasing as the mental image is – you could also do it like Raja Rammohun Roy or Swami Dayanand.
So at one level, Princess Merida’s challenge to traditions is an allegory for the movement from rule of custom to rule of law. At another level, I saw the movie talking about another one of my pet obsessions, that started ever since I read the Percy Mistry report – the difference between rules based regulation and principles based regulation. (Here’s a link to an excerpt of my Pragati article where I talk about this in detail – to read the whole thing, you’ll have to download the entire issue of Pragati as a PDF.)
To elaborate further, I’ll have to provide a synopsis of Brave and leak spoilers. The movie takes place in a Scottish kingdom in which there are four clans (or sub-kingdoms?) which are all entitled to the throne. To prevent civil war from breaking out between the four clans, the ancient laws (or customs which have all the force of law) demand that when the king’s daughter comes of age, she marry the heir of any of the other clans, and the throne passes to him. (This is what I gathered from the movie – I presume that things change if the sitting king has a male heir.) Unfortunately, the princess in Brave doesn’t want to get married, and rebels furiously. The details of how she rebels are also important, so I’m going to have to spoil those too. Next paragraph.
The rules of succession say that the first born heir of any of the four clans is allowed to compete for the princess’s hand, in a contest of her choosing. Princess Merida chooses archery, and then, once the three princes are done shooting (very badly, at that), announces that she too is a first born heir of the clans, and will shoot for her own hand. She then takes her shots, gets bulls eyes, and pwns all the princes.
But all this does is create further problems – Merida’s mother, the queen, is furious, Merida throws a tantrum, and tears apart a tapestry showing the family, and then rides off into the woods, where she finds a with who gives her a potion that will make the mother change. It does – the mother changes into a bear. Now there are two problems – how to change the queen back into human shape, and how to get Merida out of a marriage she doesn’t want.
The first problem is solved through negotiation – Merida tells the assembled clans that she too wants the kingdom to stay united instead of falling into civil war, but that there’s plenty of time for the princes to actually win her heart instead of just her hand, and so she will marry someone… eventually. And the important point is to focus on maintaining the peace by any useful means, not to get bogged down in one particular way of doing so.
The final resolution of how the queen is restored to human form can also be seen as an exploration of the principles v/s rules or letter v/s spirit dichotomy. The witch has given Merida a loophole: the spell will reverse if she mends the bond that was torn. Merida and the queen assume that this means the torn tapestry and set about to mend that – but that doesn’t work. It’s only when Merida and the Queen repair the emotional, not-quite-material bond between themselves – by apologising to each other and accepting the inevitable – that the spell reverses.
In light of this, Brave is a romance with idealism. (As in, idealism is being romanced by the script, not that the script is a romance that has idealism in it). It wants you to be motivated by larger goals instead of being wedded (heh!) to a particular process of implementing them. In fact, it treats strict rules as both problem and ineffective solution – the strict rules are what get Merida into an unhappy situation in the first place, and her attempt to use a loophole, while cheeky and badass, doesn’t solve her problems.
In real life, the focus on principles and the spirit of the law doesn’t always work that well, particularly in India.  (Ravikiran has a blogpost which speculates on why this is so.) Not only does the person or institution judging or enforcing the principle based regulation have to do so fairly, everyone who has to abide by the principles has to be believe that he’s fair. Even if the regulator is fair, but isn’t seen to be so by the regulated, principle based regulation will flop. Moving towards idealistic and goal-driven ways of doing things rather than stick with specific processes is still something we should aspire to, though – just that it’ll be a longer and harder struggle than idealism itself would lead us to believe.

The Moral Hollowness of Auto Fare Outrage

June 13, 2012

A while ago, this petition just popped up on my Twitter recommendations: an efficient system to complain against errant auto drivers in Bangalore. I was already having a gloomy day, and this has increased my bile even further. So now I will say this in clear, forceful, and largely impolite terms to all the 1,434 people who’ve already signed and to everyone who’s going to sign in the future: shame on you. Shame on the whole damned lot of you.

The auto driver is an entrepreneur, and a severely handicapped one at that. He’s too small to qualify for decent financing, he can’t run his business without a license (and the number of licenses is capped by the government), and his fares are regulated by the government. Thanks to fares being regulated by committee, they change far too late to reflect fuel prices increases or cost of living increases.

If you’re salaried, would you accept the government setting the maximum salary you could demand from an employer? If you’re a freelancer – writer, doctor, consultant, whatever – would you accept the government setting your maximum billing rate? If you’re an entrepreneur and selling something, would you accept the government setting the maximum price you could charge your customers? If you would, please let me know in the comments why, because I’d love to hear a credible justification for that. And if you wouldn’t, why are you holding auto drivers to a different standard?

You might point out that the licensing conditions mean that the drivers have to stick to the fare, and that all you’re doing is calling for enforcement. Sure. In that case, you have also lost your right to express outrage any time the Mumbai police busts anybody for drinking without a license, or overcrowding a pub, or attending a party where a couple of guests are carrying drugs. After all, that’s against the law too, and the police is just enforcing that.

But we must do something, you cry out, or auto drivers will keep overcharging us.

Here’s the problem: if the something which your petition proposes actually succeeds, it will lead to the limited resources of the police being diverted from clamping down on say, the arseholes who drive on sidewalks or the wrong side of the road, to harassing auto drivers just because you’re unwilling to pay a market clearing price. Moreover, you’re giving the police the idea that you’re just fine with the idea of them harassing independent entrepreneurs, and the government the idea that you’re just fine with the idea of price caps.

But leave that aside. Do you realise what idiots (and I’m being charitable here, I could easily go all Arundhati Roy and use fascists here) you look like when you’re calling the police to enforce a bad law that gives you, living a comfortable middle-class existence, a few extra rupees at the expense of a small entrepreneur without the social security nets that you have? We are rightly outraged if a Vedanta or a Posco takes tribal land, pays the tribals a sum of money far below what it’s worth, and then calls in state government police if they protest. Do you not realise that this is exactly the fucking same thing that you’re calling for?

So if you must do something, here are a few other somethings you can consider that aren’t as ill-advised or morally abhorrent:

  1. Get a better paying job so that you can afford your own car.
  2. Petition for better mass transit options like round-the-clock bus services, more regular bus-services, or an expanded Metro network instead of for police harassment.
  3. Petition for a change in the licensing regime so that there can be autorickshaw fleets the way there are fleet taxis. Why shouldn’t Meru and Easy run autos as well as taxicabs, and maintain a fixed, corporate rate?
  4. And since I’m on a roll here – petition for privatisation and competition in bus operation, so that we have competing bus or minibus operators running defined routes, open to the public.

These somethings have the benefits that they give you alternatives to being ripped off (and the assumption that you are being ripped off in the first place is a questionable one), they make life better for other people as well, and they don’t call for police harassment. Please do break out of your entitled little bubble and consider them.


Saving for Marriages

April 8, 2012

I am at Kanchipuram today. This is due to dire circumstance and not by choice. My car is being serviced (this involves spare parts from Europe and so will take a month), and so I couldn’t drive back. The driver is on holiday for Easter (hey, Happy Easter, everyone!) and so he can’t drive me to Chennai and back in another car. And I could take the bus except I am not very enamoured of taking a bus to T-Nagar and then an auto to Velachery in the April heat.

All right, that last bit is laziness, not dire circumstance. Be that as it may – due to a combination of laziness and dire circumstance – I am spending this Sunday at the guesthouse in Kanchipuram instead of my flat in Chennai. This also meant that after a very long time, I read the Hindu Business Line, and specifically its Sunday personal finance agony aunt column.

The letter in today’s column featured a goal which features almost every Sunday:

For my daughter’s graduation, I would require Rs 10 lakh in 2021 and Rs 10 lakh for her post graduation. I wish to create a corpus of Rs 12 lakh for her marriage by 2030. For her marriage, we have 30 sovereigns of gold and 2 kg silver.

(The Hindu Business Line: Investment World)

Before I get to the financial matters, let me address the language. As an editor and grammar-bigot, there are two things about this which make my eye twitch:

  1. It uses ‘would’ instead of ‘will’. This appalling misuse is clearly notrestricted to North Indians.
  2. It uses ‘marriage’ instead of ‘wedding’.

Using ‘marriage’ instead of ‘wedding’ actually makes me twitch twice as much, because I have no way of realising which the letter writer actually meant. Did he want to have twelve lakh rupees to spend on her wedding? Or did he plan to give her twelve lakh rupees as a sort of nest egg to accompany her through married life?

If he did mean wedding, that makes me twitch for another, non-grammatical reason. I wish that just one Sunday, somebody would write in to the personal finance advice column and proudly announce that they were saving purely for retirement and that if their kids wanted a big fat wedding they had better pay for it themselves or elope.

This whole saving up so you can afford a big wedding thing must be one of the leading causes of misery in India. So much present consumption foregone, and all it accomplishes is to put the bride and groom through even more stress. Haakthoo.

The Economics of Autos and Cabs

July 24, 2011

Hello beloved readers. For a personal project, I’m trying to understand the economics of being an autowala or taxi-driver (especially in Mumbai). Do you have links or pointers to any research or other reading material about this? The topics I’m looking for include:

  • What the licensing system is
  • What the revenue and costs are
  • How the union politics work – how many unions there are, what there primary interests are, and so on and so forth
  • Whether there are different models of who owns and who rents the cab, or whether there’s one dominant practice
If you have links or citations, please do share them in the comments. If you have personal experience, please share that too.

On Chequebooks

February 19, 2011

I used to work for Standard Chartered Bank, and so my salary bank account was with them. Even after I left, this continues to be my main account. This was partly because I already had mutual fund installments set up to be debited from it, and I was too lazy to go through the rigmarole of shutting them down, and starting fresh ones from a new bank. There is a moral here in how excessive paperwork prevents customer churn.

Anyhow. Right from the time I got the StanChart account, I faced a fair bit of mockery from people like Skimpy and Swami about how difficult it was for me to find ATMs, how I would never be able to pass a cheque in a small town, and so on and so forth. These days, the situation has flipped. My StanChart account is actually more convenient than an HDFC or ICICI account (perhaps not SBI).

This is because of three reasons:

  1. Debit cards and credit cards are accepted everywhere regardless of issuing bank, so the gap between an HDFC and a StanChart is closed.
  2. My balance and assets under management with StanChart have built up to a level where they give me unlimited free cash withdrawals at any bank’s ATM in India. So the ATM gap is closed.
  3. The major problem with StanChart is that cheques are only payable in forty cities in India (and that counts Gurgaon, Panchkula, Secunderabad and so on as separate cities). But now that electronic funds transfer is widespread, that doesn’t make much difference. You can just take someone’s account details and wire money to them instead of going through the nonsense of sending a cheque, having the recipient carry it to the branch, deposit it, and then wait three days for clearing. And – this is the best part – StanChart gives free EFT. HDFC and ICICI charge 5 rupees for every transfer.

(On the other hand, I have to pay Rs 250 to receive a foreign currency remittance. This will continue until I reach the truly rarefied echelons of private banking. Oh sigh. Then again, I don’t know if ICICI and HDFC manage to sting you for this too.)

Now as several people on my twitter timeline have pointed out, this is remarkable lunacy. Charging for electronic transfers and keeping cheques free encourages people to use cheques instead of EFT. This wastes:

  1. Paper
  2. The time of the guy receiving the cheque
  3. The time of the people working at the branch and operations back offices, who’re now processing cheque clearing when they could be doing something better with their time

This may be because ICICI and HDFC think that the convenience is worth 5 rupees per transaction. Moreover, there are so many old people who’re forcing them to maintain branches anyway, they might as well fleece internet users until the older generation dies off. The five rupee EFT charge is just the latest in the list of ways in which the older generation is screwing over the younger generation (other, more severe examples include fiscal deficits, ecological pollution, and tiger momhood). Or it could just be because they treat internet banking as a profit centre, their product managers are determined to show revenues somehow, and nobody on top has made the connection between EFT charges, people shifting to cheques, and higher operations costs. Which it is, only someone from the banks can tell us.

Assuming we lived in a sane world, everyone used internet banking, and actual cheque operations could be brought down to a minimum, the fees would actually reverse. You would have to pay to use chequebooks (oh, and I think ICICI and HDFC also charge for additional chequebooks in a year or something, while StanChart doesn’t. Snort.) while EFT would be free.

In such a world, cheques wouldn’t serve a functional purpose as much as an aesthetic one. You would give someone a cheque if you wanted to make a ceremony out of handing them over (white) money. Actually, this is already done with the giant cardboard cheques at cricket matches and quizzes, but I was thinking of something more understated and classy.

Because of the huge back office costs a bank would incur in maintaining cheque clearing operations, cheques would become ridiculously expensive, like annual fees on a top-of-the-line invitation-only credit card. Probably more expensive, honestly. They’d be offered only to really rich private or premium banking customers, and as such would be really good-looking cheques. They wouldn’t be the ostentatious prize ceremony cheques, but regular sized cheques on really nice paper – thick and creamy, with lots of embossing.

They would be to electronic funds transfer what a Vacheron Constantin mechanical movement timepiece is to a quartz digital watch: very good-looking and made just as functional at ridiculous expense. You could draw them out of a coat inner pocket and sign them with a fountain pen, and the aura wouldn’t be ruined by low-gsm paper. Or, for that matter, say “I say, Ram Avtar, be a good chap and fetch me my chequebook, would you?” They would be neo-Edwardian cheques.

Of course, none of this will be possible until electronic funds transfer becomes ubiquitous. But then it is only good and proper that modern technology brings about neo-Edwardianism.

The DAME Was Late

October 12, 2010

Swami A Aiyar’s latest column is about how the messes in the Commonwealth Games are the ones the government has made, while the few successes involved are the ones the private sector are involved in. This is a sentiment that I generally agree with, but it commits one key error when it talks about how the Airport Express line opening late is an example of government failure.

Actually, the public sector DMRC completed almost all its work within the hard deadline of the Games opening ceremony. Though they did miss their own deadlines; and the violet line still isn’t operating on the last few stations. The Airport Express line however was a private sector responsibility – it’s being operated by Reliance Infra (Anilbhai, that is). The DMRC was supposed to do the civil engineering, and R Infra (whose website’s core infrastructure page says it’s under construction – tee hee) didn’t do the electrical work and testing on time. To be fair, the DMRC has an interest in putting the blame on Reliance – they get to charge it a penalty.

The Swaminomics column also mentions Reliance’s putting up the world’s biggest refinery in record time as an example of private sector excellence; so the Reliance failure this time around is kind of piquant. The difference between the two situations could be explained by:

  • Dhirubhai was betting the farm with the Jamnagar refinery, and this added a little bit of desperation. The Airport Express Link is nowhere as important or as much of a flagship project; so management was not quite so obsessive about getting things done ahead of schedule.
  • Dhirubhai had it in him, while Anilbhai is a wanker. This is my favourite explanation, but then I’m biased. It is an explanation that is shared, though – some years ago I read either in Business Standard or Business World a deliciously snarky editorial that when talking about Anil Ambani’s attempt to set up ultra-mega power plants in UP, talked about how only an idiot would want to sell power to the bankrupt Uttar Pradesh electrical utilities. Sadly, I’ve lost the link.
  • Or to be very cynical, since this is a public-private partnership project, Reliance Infra presumably ends up making money no matter how late they are.

That last point could work the other way around too, though. Maybe Reliance Infra isn’t actually that late, and the Commissioner of Metro Rail Safety is refusing to give the clearance to extort a bribe out of Anilbhai.

The exasperating thing is that ever since the news about the Airport link not opening on time came out, there’s been a news blackout on what is going on. There was that one Business Standard article I linked above on the penalty, and nothing since then. Not even news about when the line will open. So we can’t actually know what is going on, and who actually fucked up. What sadness.

On a more personal note, I wish there was at least some information on where the airport station actually is. At present, DIAL hasn’t got the Terminal 3 parking completely functional; so being picked up at the new terminal is a nightmare. If the metro station is right inside T3, though, it would mean I could come to Delhi, catch the metro to Dhaula Kuan, and get picked up from there. That would be awesome. Of course, this would also require domestic operations to start at Terminal 3. They haven’t, and this time this is because of fuckups from both the private and public sector – the IT systems didn’t work back in July, but now the bottlenecks are the entirely government owned and run Delhi Transco and Delhi Jal Board.

Oh, and for a very well written piece on how the vast majority of fuckups are governmental, not private sector, here’s Salil Tripathi in WSJ.

Notes From a Delhi Weekend

October 11, 2010

Or, too long for tweets, too short for individual posts. This is an Amul Chocolate blogpost. Or perhaps Goldilocks. Whatever.

  • To my great sadness, I fell sick on Saturday, and though my family had tickets to the athletics events at the Commonwealth Games, I wasn’t able to attend. I’m not sure when India’s hockey semifinal is, but between leaving tomorrow afternoon, and the immense difficulty in getting tickets, I think I won’t be able to attend that either. Such is life.
  • The innermost lane on all roads to Games venues have been reserved for vehicles with Commonwealth Games stickers. I am astonished for two reasons – first, that Delhi’s drivers are actually obeying this rule for the most part; and second, that there are so few vehicles with stickers. Since this is Delhi, I would have expected anybody with even a tenuous connection to anybody in government to have stickers. This is not the case. Astounding.
  • My home is near the tennis stadium, and thus my neighbourhood has born the brunt of Commonwealth Games ‘beautification’. In the past year, our sidewalks have been ripped up and relaid thrice. The last time (in the beginning of August), this involved raising the sidewalk to a height of six inches above road level. All well and good, except this was also done across everyone’s gates, making it impossible for cars to move from the roads to the driveway. The next morning, the MCD Senior Engineer accepted bribes from everyone to build small ramps to facilitate entry and exit. Well played, I say.
  • That said, the new sidewalks and road berms are very nice indeed. They are lowered to road level at zebra crossings, the berms too are interrupted to make an island at said zebra crossings. And when I walked from Safdarjung Enclave to Green Park, the new sidewalks made the walk much better than it used to be. However, it is still not perfect, because six things keep fucking up what is otherwise an excellent sidewalk:
    • power transformers
    • garbage dumps
    • cars parked on the sidewalk
    • street vendors
    • security guard boxes
    • shops enroaching on the sidewalk
  • The last two categories – shops pushing their displays or stairs onto the sidewalk and security guards’ kiosks being placed on the sidewalk instead of inside the house are sheer bad civic sense on the part of private parties. The street vendors and cars parked on sidewalk are bad luck or incompetent planning – Safdarjung Enclave and Green Park were developed in the 1960s when few households had even a scooter, and nobody could have anticipated that every house would have two cars at least. The transformers and garbage dumps on the sidewalk, though, are inexcusable enroachments by the government itself on public property.
  • There is now a FabIndia outlet in Green Park. Delhi visits have therefore become even more expensive.
  • Green Park Market is becoming positively Chennaiesque in the density of pharmacists. It has at least five, in what can’t be more than a three kilometre stretch. I suspect this may be a result of the Adyar Ananda Bhavan triggering a slow metamorphasis. If it continues, than in twenty years Green Park will no longer have Punjabis but elderly TamBrahm thathas taking morning walks in GAP shorts and white Converse sneakers. Whatay.
  • I also finally got to travel on one of the new low floor buses with the bright green paint jobs. If you can get a seat, they’re definitely more comfortable than the old rattletraps. If you can’t, there’s not much difference. The getting on and off on the low floor is a small delight though.
  • I have more to say on the subject of buses, but that is a blogpost (or possibly an oped) in itself.
  • The Hindi signage for the Green Park metro station reads ग्रीन पॉर्क and not ग्रीन पार्क. That is, Green Paurk. The signs inside the coaches are fine though. I am mystified.
  • The Airport Express Metro Line is not ready yet. Oh sigh. But more on that in a separate post.
  • The Metro coaches themselves are very nice, and the way they use LEDs in the route strip above the coach doors to show which station is coming next is very clever. They also have power points for laptop and mobile charging; though the coaches seem far too packed for anybody to use these properly.
  • Yes, the coaches are jampacked, even on the South Delhi stretch of the Yellow Line that people were afraid would be underutilised, because, hey, South Delhi snobs always take their cars. The Violet line was only jampacked upto JLN Stadium though – and that was presumably because people were going to watch the Games. But then again this was on a Sunday night – a weekday maybe more crowded.
  • There was a Wired article which said that the major attraction of public transport over driving yourself was that instead of focusing on the road, you could read, or play games on your smartphone, or tweet, or suchlike. This is true in general, but the Metro is so crowded that reading will require immense concentration and Zenergy. And the network in the underground parts of the Metro is good, but not good enough.
  • In fact, the Metro is so crowded that it leads to practically Bombayesque levels of overhearing other people. On the violet line, I ended up overhearing a girl who was terribly unclear on the concept of interchanges. This was in addition to the person who asked me at Central Secretariat station if the train we were getting into was going to… Central Secretariat. He believed that the sign saying Central Secretariat was actually denoting the train’s destination.
  • I was tempted to be snarky about people who cannot understand how the Metro works, but after reading this Slate article on signage, I am more sympathetic. It is actually an important question – how do you explain the concept of an interchange to somebody whose learning style does not mesh well with maps?
  • Also on the violet line was a small child who was surprised that the train suddenly emerged from the underground tunnel and went on to a bridge. His mother explained to him that the Metro runs both under and above ground. He pondered this, and then nodded gravely.
  • The story of 4000 condoms being distributed at the Commonwealth Games Athletes Village and then the drains getting clogged with the condoms (insert cleaning your pipes joke here) is by now known to everyone. But all these foreigners keep having sex anyway. What I am more concerned about is – are the games also helping the local teenage volunteers get any action? They seem suspiciously cheerful. And if they are, how much does the bright red and white volunteer tracksuit contribute to this happy state of affairs? It is true that bright plumage helps birds attract mates, but in that case only the male is brightly coloured while the female is dowdy. But here, the male and female volunteers both have the same shiny tracksuit. This must be investigated.