Indian economic development - some fresh thoughts

There had been times when a GDP growth of 3.5 or 4% per annum in India was thought to be remarkable. Nowadays, people feel somehow disappinted if the growth rate registers 7.5% rather than 8%. There had been times when inflation had been over 25% in a year (and the people have had to live with it). Presently, even a 10% inflation rate is popularly unacceptable. For the Reserve Bank of India, the target is to keep inflation within about 6%. Gone are the times when one had to wait for days to get a cement permit sanctioned for building construction or even to make an outstation call to a relative or to queue for hours to get a berth reervation in a train. Now's the time for messages "at the speed ofight", with the wi-fi or "hot-spot" willing, on-line pruchases of most commidities, and on-line train reservations. This did not happen overnight. But how did it at all happen? To get a glimpse of this, have a look at the book "Eco Yatra", published by Tata McGrawHill - this speaks of traversing the path of India's economic change for the last six decades. It tells the story of how this change took place over the last 60 years or so, when in 1952 Jawaharlal Nehru presented the nation with the First Five Year Plan with an investment plan of just Rs 2,070 crore (in comparison, the Tenth Plan 2002-2007 had an outlay of Rs 1,484,131 crore). It sifts through hard economic data, while bringing out the broad trend lines, without losing sight that economic development also has an underlying human dimension. Thus, at one level, the book traces the changes that impacted the people at a human level; at another, it takes the reader past the major milestones on the road to economic change over the last 60 years; not in a bookish way, but as a chronicle of national and individual aspirations and achievements.

Copies of the book are available with Amazon. Check at -- -- https://www.amazon.in/Eco-Traversing-Indias-Economic-Decades/dp/0070680698/ref=sr_1_6?dchild=1&qid=1612095758&refinements=p_27%3AProsenjit+Das+Gupta&s=books&sr=1-6

Sino-Indian Border Conflict - a view-point

Recently, Bookgeeks reviewed the book entitled "A Conflict in Thin Air" about the Sino-Indian Border Conflict. The review stresses the detailed research that went into thw writing of this book and the wealth of details about Tibet, China and British India that shaped the the origins of this conflict. The link to the review is as follows - https://www.youtube.com/watch?v=4mbXnhg7RJ4

Discovering Calcutta - A book now in Bengali

 There are many books on Calcutta in both English and Bengali. Some deal mostly with the history, some are about a few of the well-known families of the city, some are on the Bengali cuisine, etc.

There is now - thanks to Ananda Publishers - a book that takes the reader around in easy-paced walks to discover the city for oneself. 

This book, "Paye Paye Kolkata" (or, Walks in Calcutta) guides the reader along the main routes to see the city more fully, in its history, architecture, something of its social history, the eateries, and so many things. There are sections on old maps of Calcutta, the well-known sweet-meat shops, old paintings and lithographs, and so on.  The book is available at most retail outlets, or from the office of Messrs. Ananda Publishers.

 

Sino-Indian Border Conflict: a Historical Perspective - I

Excerpts from the book "A Conflict in Thin Air",on the Sino-Indian border conflict, published in 2016 by CinnamonTeal Publishing (also available through Amazon) --  

"Tibet, a vast plateau at an average height of more than twelve thousand feet altitude in most places, straddles a large chunk of Asia, bounded by the Himalayan mountain ranges to the south and pierced in places by high passes like Lanak La, Shipki La, Mana, along the Himachal Pradesh-Tibet and the Kumaon-Tibet borders respectively, the passes in Nepal, and Nathu La, and Jelep La in the Sikkim Himalayas. The Karakoram mountain range stands guard to the southwest of Tibet, the Kuen Lun range on the west, the Koko-nor area and vast alkaline marshes on the north east and, a rugged tangle of hills and forests mostly between ten and fifteen thousand feet on the east bordering Yunnan and Szechuan provinces of China................Over the last thousand years or so, traders from Kashmir, Bushairis from Himachal Pradesh, Bhutias from Kumaon, and the Nepalese and Bhutanese traded across the high mountain passes for wool, salt (Tibet having many saline springs and lakes), gold, borax and so on, while the Chinese traders via Yunnan brought in great quantities of black tea that the Tibetans were inordinately fond of. In turn, Tibetan traders came with their wares of gold, silver, leather, and of course wool, into the marts of India and China (Tibetans were bringing their goods-laden mule trains to trade into Kalimpong in the Darjeeling hills in India via Jelep La as late as 1950s).

A view of typical Ladakh landscape

Pangong Lake in Ladakh - scene of recent skirmishes

I had visited Ladakh for sight-seeing in June 2013 and that as well as a chance discussion with a friend set me off to know more about the Sino-Indian border conflict. It took me over 2 years of research and going through about 70 books and several maps to get a grip on the subject. This resulted in my book on the Sino-Indian border conflict that is mentioned above.

Excerpt -- "At the core lay the long-standing Sino-Tibetan animosities of over a thousand years. And,  the persistent attempts of Tibet to assert its independence with the equally persistent efforts by successive Chinese administrations to enjoy the fruits of Mongol and Manchu imperialism since the mid-13^th century in Tibet, Sinkiang and Mongolia. Added to this was the ups and downs of Tibetan and Chinese administration in the respective countries since the 17^th century (including outbreak of civil wars in the two countries), the advances made by European and British imperialism in both China and India, the Sino-Russian tussles in Mongolia, and of course, the “Great Game” between Britain and Russia............... There have been quite a few books on the Sino-Indian conflict of 1962, such as those by Neville Maxwell, Karunakar Gupta, S.R. Johri and John Garvin (amongst others, besides those by Dalvi and Kaul) fairly well-known to the Indian reading public. But, as my studies revealed, there were many, many others, drawing upon extremely valuable archives and records that, together with some basic histories of China and Tibet, help provide valuable insights and perspectives on the whole issue of the “Why?” of it. I have seen those records through the eyes and pens of renowned scholars such as Dr. Alastair Lamb, Dorothy Woodman, Margaret Fisher and her co-authors, Parshotam Mehra, and those of much earlier days, such as Charles Bell, E. Teichman, Robert Reid, T. Richardson, L. Petech, and many others, whose names have been mentioned in the Bibliography. Added to those should be the known and unknown surveyors of those border areas, whose maps with their wealth of details are a joy to behold."

This brief introduction to the geography and history of Tibet and China should help in a better understanding of the issues. The book of course gives a fuller exposition.

Jaisalmer in Rajasthan

 As most people know, Jaisalmer is situated in Rajasthan right on the western border of India. It is well-known for its fort and the desert scenery nearby. It is connected by air and rail from the major cities like Delhi, Mumbai and Ahmedabad. 

 

The Jaisalmer fort is truly magnificent and towers over the city. The golden-yellow sandstone with which it has built given a spcial glow in the early or late sun-light. 

Inside it is equally impressive with beautifully designed pavilions and intricate carvings.

But it is the evening out in the desert together with a camel ride over the sand dunes that is most attractive to tourist.

West Bengal - Terracotta temples

Terracotta,  or unglazed fired clay products, is an ancient art form in India. It seems to have developed as an extension of pottery-making, which is possibly the oldest craft practised by mankind after the making of stone tools. 

It was of course much later, possibly around 700 or 800 CE, when temples began to be built in India that ways had be found to decorate the temples with sculptures, and it was mostly in stone in those days. Sophistication in temple architecture progressed with time and finer and more elaborate carvings began to be made by the 15/16^th centuries. 

Yet finer designs and in less time and less effort came with the development of terracotta tiles to decorate temples with. Necessarily, terracotta generally flourished where stone for temple building was scare and clays were abundant, as found in the numerous river basins, such as the Kangsabati, the Damodar, Ajoy, Rupnarain rivers and of course the Ganga (Hooghly) in West Bengal. It was of course to some extent deliberate because of the ease and the sophistication of designs that could be made in clay relative to that in stone.  This found a great flowering in the late 17^th, through the 18^th and into early 19^th century. A good part of this now has become part of Bangladesh but a great deal remains in West Bengal to be enjoyed in towns such as Bishnupur, Kalna, Ilambazar, Guptipara and elsewhere in the Bankura and Midnapur districts of the state. These sites are quite easily accessible from Kolkata by journeys of just three to five hours by bus, vehicle or train.

The "Jor-Bangla" temple in Bishnupur

"Raghunath" temple in Ilambazar

A hunting scene on Jor Bangla

A detail with Shri Krishna in Shyam Rai temple, Bishnupur

  

As the above illustrations indicate, the motifs for the sculptures in the terracotta are diverse, ranging from the secular, such as wars and royal hunts, to the common devotional theme of Shri Krishna with the gopinis in Vrindavan. Tile after terracotta tile is placed on the basic superstructure of the temple, made here mostly of laterite blocks, to create a wonderful piece of art. 

pdg-books: Books by Prosenjit Das Gupta

Over the years a number of books on history and wildlife by Prosenjit Das Gupta have been published. The first such was "10 Walks in Calcutta", published in 2000 by Harper Collins, which was on the Best Seller list of "The Statesman" newspaper for several weeks.
Over time, other books appeared and a consolidated list is as follows --
(i) "10 Walks in Calcutta" published in 2000 by Harper Collins and revised, enlarged edition published by Hermes Inc. in 2006.
(ii) "Walks in the Wild", published in 2002 by Penguin Books, being an account of the impressions and experiences in India's  wildlife in the national parks and wildlife sanctuaries from 1968 to 2000; this was subsequently revised and enlarged and published with the title "Wild Experiences"by Sanbun Publishers in 2011.
(iii) "Tracking Jim", published in 2005 by Penguin Books, documenting researches on the life and times of that legendary hunter, Jim Corbett, who shot many man-eating tigers in the Kumaon region of India and authored the well-known books on his experiences on those hunts. It also covers the search for the localities and places associated with Corbett's hunt for the man-eaters, and their descriptions, so that others interested may discover Jim Corbett in their own way.

(iv) "After Elwin", published in 2007 by Chronicle Books, deals with the life and researches by the well-known social worker and ethnographer, Dr, Verrier Elwin, on some of the tribes of eastern and central India, such as the Saora, the Baiga and the Muria. It goes on also to record the travels and experiences of the author in following up on the foot-prints of Dr. Elwin in those same tribal areas much later, in the 1970s. This was substantially revised and brought out with the title "Chasing a Dream" by CinnamonTeal Publishing in 2014.
(v) "Issues and Idioms", published in 2015 by CinnamonTeal Publishing, was the author's first foray into current affairs of India. This has attempted to unravel how the language of political communication and public discourse in both Parliament and the national media has changed over the 60-odd years since Independence of India in 1947 and why.
(vi) "A Conflict in This Air" published in 2016 by CinnamonTeal Publishing deals with the Sino-Indian border conflict in 1962 and covers the researches by the author into the history of the three main protagonists in the the issue, viz. China and Tibet since the 8th century, with British India coming into it since the early 19th century while Imperial Russia was ready to intervene at times. With the India-China border dispute cropping up every now and then, this provides useful background material. 

(vii) "A Partition in the Mind"published in 2018 by CinnamonTeal Publishing attempts to put the Partition of India in a historical perspective by trying to understand the basic philosophies of Islam and Hinduism and how this in one way or the other impacted the development of India as a nation. It also deals with the role of the colonial British administration, which directly or indirectly played an important role in this process.  It is to be hoped that this would lead to a better understanding of how the Partition of India came about.

The more current books will be available On-line from CinnamonTeal Publishing. Some of the earlier books have become out-of-print over the years but copies may still  be obtained from Amazon, Goodreads, and several other agencies.

Indian current affairs - the 7th Pay Commission, problems of economic choice, Goods and Service Tax

A market in Kolkata

The 7th Pay Commission

The TV and newspapers are full of reports and articles on the 7th Central Pay Commission recommendations that have been just accepted by the Government. The main points that stand out are (1) the minimum salary would be Rs. 32000 per month and the maximum  Rs. 2,50,000 per month and (2) that this would result in a pay-out by Government towards the revised salary and pensions to the tune of over Rs. 100,000 crores in a full year.
Starting with the 5th Pay Commission in 1996 that had a pay-out of about Rs. 35,000 crores in a full year, to the 6th Pay Commission that resulted in additional liabilities to Government of about Rs. 60,000 crs. in a year, we now have the 7th Pay Commission with its liability of about Rs. 100, 000 crores. The Hon'ble Finance Minister has been candid that this would impact the fiscal deficit position besides possibly adding to the current inflation rate.
Economic theory teaches that prices of any good or service are basically determined by supply and demand. This applies - with some "ifs" and "buts" - to price of labour, land or capital. In the non-government sector salaries and wages are usually determined by bilateral or trilateral negotiations on two major considerations: the demands by the labour and the "paying capacity" of the industry or service organisation. Government obviously is not bound over by any "paying capacity", because it can always raise taxes to pay this liability; or borrow or just print notes.
Straight-forward wage-fixation is supplemented by issues of allowances and perquisites (that is, non-monetary benefits, e.g. casual leave. special leave, leave without pay)  and by the work environment, job satisfaction and all that. Besides, there is also the element of "Minimum Assured Career Progression" that Pay Commission have recommended, which is really unknown in the non-government sector. And at the end of it all, comes the "deliverables" or the "output". In the case of products, this is simple enough; but for services, especially for public or government services, this is certainly difficult to define or quantify.
Any responsible government has also to factor in how this relates to the rest of the country, to the average Per Capita Income, to the Median Income, and so on in the rest of the economy, and to the output, the level of services, pattern of savings (including diversion of savings into real estate or gold), pattern of consumption at different income levels, and all that.
It is only then that major distortions in the economy may be avoided.


The 7th Central Pay Commission - "come-backs"
I have had some "come-backs" over e-mail that the original objectives that central pay commissions set out with - to bring about a degree of "parity" between government salaries and  private sector emoluments - has by now been turned on its head. Apparently there is greater resort than before in government in India - perhaps even more in state governments - to "out-sourcing" of services, be it through re-appointment on a contractual basis of a recently-retired employee or an outside "consultant" or a plain service agency, be it for car hire or for security or office maintenance.
Economics, it appears, has a habit of clawing its way back  unexpectedly.


A recent bank scam
A recent press has it that the Directorate of Revenue Intelligence in the Government of India has unearthed a Rs. 2240 crores scam under which certain subsidies were given to some exporters for non-existent exports, with the connivance of some bank officials. The question that immediately asks itself is that why the DRI had to find out about this wrong-doing. Is it that the rules and procedures in the banks are not good enough to track down such malfeasance? As some one pertinently put it, "Rules are made for gentlemen. They are meant to be broken by thieves". That brings to the fore some management issues: from which level in the banking system should accountability and vigilance start? Should it be at the level of the branch manager,  or the zonal manager, or where? Banks also have audit departments to do rigorous cross-checks. How do such misdealings escape their attention? It should be clear that someone somewhere is not doing his or her job.



The 7th Central Pay Commission -  A second view-point
Recent discussions with some retired central government officers reveal that they had started their career in a technical wing of government at a starting salary of Rs. 400 per month in 1958 and, with deductions for housing, provident fund, etc., their take-home pay was Rs. 340 per month. When they retired in 1994 at the level of a general manager with overall charge of about 4000 employees their gross salary was Rs. 6800 per month, with a pension of Rs.3400 p.m.
Seen in the perspective of salaries in the private sector in 1994, Rs. 6800 p.m. for a general manager in a government plant may be said to have been lower by at least 30 to 40%, or even more. Yes, they did enjoy some facilities such as subsidised housing, free car, subsidised medical assistance, but adding  these back to the salary still keeps it low relative to private sector, where also senior executives were provided free housing, free car, etc; although these were assessed for income tax as per the permissible limits. So, providing a pension of Rs. 50,000 p.m. to a government officer in 2016, when the price levels are at least  300% higher than they were in 1994 should not raise too many eyebrows. It should make one think.


"Jam today"  versus "Jam tomorrow"
This was one of the adages that was drilled into the minds of students of Economics in the 1950s and 1960s.The idea was that using up current income in extravagant consumption is not a good way to plan one's life and, that saving for the future is a good thing. Seldom did the factor of price inflation enter this discussion.How would Rs. 500 saved each month (that would be a big thing in the 1960s and 70s) at 10% annual interest end up after 10 years, given a 10% annual rate of inflation? Moreover, the inflation was at a Compounded Annual Rate without any remission. If one has it that death and taxes are the only certainties of life, one can safely add inflation as well.
Savings, in the physical sense of setting aside from current income and consumption, was considered to be only way of accruing capital and, with capital, one could obtain assets, be it a house, or a car, or a Frigidaire, or shares and bonds or gold. But most assets, whether a house or a car, depreciate over time and increasingly more has to be paid out for their maintenance.  Thus when bank savings are eroded by inflation, and most types of physical assets have a heavy maintenance cost, it makes eminent sense to transform the savings into land, shares and in gold, because it seems that over a long period, say, 25 to 30 years, they can help to beat the inflation.
Going beyond the level of the individual to the national plane, where investment in shares or gold are not practical solutions - though they have been tried out - investment in infrastructure (i.e. roads, railways, ports, power, tele-communications, etc.) that yield a stream of output over many years and thus generate additional income and employment would be a good thing. . Thus "jam tomorrow" seems more sensible at the national plane, but at the individual level seems to be hedged with many "ifs" and "buts".



The Integrated Goods and Services Tax
Politics and law-making is a funny thing: sometimes it is content just to make incremental changes, sometimes, possibly with a huge load of "incrementals", it attempts a paradigm shift. The Integrated Goods and Service Tax is something like the latter. For more than sixty years India lived with the Excise Duty on manufactured goods with its specific rates (to begin with) and moving on to ad valorem rates.Then came the MODVAT and VAT (with its set-off and set-on features) followed by Service Tax in 1994  as part of the "reforms" process, and now there is the Integrated Goods and Services Tax, which has yet to complete the legislative process.
Leaving aside the grumblings about what should be the basic rate of this tax - at 15% or 18% or 22% or whatever - it has the unique quality of attempting to create an Indian Common Market of 1.22 billion people with rising incomes and matching aspirations. It should surely energise the respective state governments to do their best to build on their "comparative advantages" in terms land, water, minerals, industry, agriculture,  manpower, skills, and so on. With 90% of the revenues of the Tax going to the states, they have to husband and utilise these resources in the best possible manner to grow, and create the base for further sustainable growth. That means a lot of hard work is left yet to be done.