Monday, 24 December 2012

Don't let them off this easily

The protests in Delhi has the Government reeling back in shock. Once again we see the extent of disconnect between the people and our leaders. They had no idea how much rage was simmering among the people. They never fathomed such a reaction. Hence they never took to solving the problem seriously.

Now it is in their face and they do not know what to do. So instead they have found a quick fix yet again: Increase the severity of the punishment. The Government now plans to quickly pass a new amendment to appease the public and claim that they responded swiftly to the situation when they beg for votes next year. It is disappointing that they may get away with it.

The demand for an increase in punishment for rapists has been gaining mommentum for a while now. Many prominent leaders, both in the government and outside it, have been debating in it's favour. This would be a mistake. Why are we obsessed with the idea of killing the rapist or giving him a life sentence? Why are we discussing how to make his life more miserable after he gets caught, when the chances are he won't? In our thirst for a quick solution and instant revenge has anyone realised that we might be encouraging murder?

Let us be straight here; we have no reason to believe that the problem is leniency of the punishment. We have plenty of reasons to believe it is the lack of enforcement. The all India conviction rate for rapes stands at 26.4%. Effectively, 1 in 4 victims who dared to report the crime get justice. The cases which are not reported? That is a whole different story.

It is not like the nuisance, that is our justice system, is not covered, but it is not given the spot light it deserves. This is the only way forward. We need a combination of judicial and police reforms that will permit a higher conviction rate of rapists and give confidence to the people that they shall recieve justice. Instead we are adovacating a solution not completely thought through with major side effects.

Assume we punish rapists with capital punishment and think this scenario through: A man stands over a girl after violating her. She is lying incapacitated after the ordeal completely at his mercy. This man now contemplates his choices: He could kill her effortlessly in her current state, thus eliminating the only person who could recognise him. If caught, he would get the death penalty. On the other hand, if he left her alive it would increase the chances of being convicted substantially, on which he would be killed anyway. What will he do?

I am fully aware of how cold my logic may sound, but this is simple game theory. The dominant strategy for the rapist will always be to murder the victim and increase his chances of survival. What we hoped would deter rape, could potentially just increase rape and murder. Furthermore, it could also reduce the conviction rate due to lack of evidence!

The fault lines have existed for ages, and the recent gang rape just gave it the impeteus it needed to reveal the extent to which the anger had festered. This is an excellent opportunity to demand action from the Government, but we should not be satisfied by a half thought out amendment. The Government will give it to us and wash their hands of the whole situation. We should instead fight for deeper structural reforms. Lets not allow them to divert the focus from the main issue. Don't give them a choice. Ask for reforms. Ask for results.

Saturday, 20 October 2012

Dr. Manmohan Singh: The Dark Knight..?

I was always a little confused why an honest and decent man like Dr. Manmohan Singh tied hands with Congress and agree to become their puppet. Maybe he got duped into it for the first term, but why did he agree to do it again?

Many people view him as an intelligent academician, but also as a man with a weak will and a poor leader. I cannot claim that this judgement is not justified. I have the same opinion myself. But lets consider another possible scenario.

What if Dr. Manmohan Singh is India's Dark Knight?

For people who are not Batman fans (weird as you guys are, I cannot afford to alienate you), let me explain the concept. Gotham city (fictional) is in chaos. Organised crime is at an all time high, and the police is as much involved as the mob-bosses. From within this chaos appear two men who have the courage to fight the status quo. Bruce Wayne, the billionaire play boy, and Harve Dent, the righteous District Attorney. Harvey Dent publicly and openly fights against crime and corruption through the lawful tools available to him, while the billionaire Bruce Wayne chooses a slightly distinct method: He becomes the Batman and directly intervenes in the criminal activities. As a vigilante, his actions are often misunderstood by the public and he is hated for it. But the Dark Knight bares the hatred to do what he knows is right. Some times, being hated is part of the job description.

Now imagine a man wanting to help change his country. He is smart and intelligent when it comes to knowing what decisions to make, but just does not have the political backing. He is frustrated because he doesn't have what it takes to be a politician or start his own party. But one fine day, he gets the seat offered to him on a platter, but with a catch; he has no real control.

The righteous Harvey Dent would have rejected such an offer. If he was going to do it, he would do it right. But the Dark Knight would see this as an opportunity. Maybe its better he gets it then someone worse. Maybe this would give him some room to bring those changes which he knows the country needs. But if nothing else, it would allow him to at least moderate the poor governance which would otherwise be carried out. So that man decides to make a gamble.

Now in the position of power he feels severely suffocated. He finds very little room to make the reforms he had in mind. Things are going smoothly. The country has a 8 to 9% growth rate. No one sees any need for reforms or changes. They like the status quo. 

So what does he do? He waits. He knows that the current path the country is taking will eventually lead to a point where the Government will become desperate. He knows that direction in which they are headed will lead to poor economic growth and a huge deficit. And when the situation becomes critical they will be desperate enough to give him a free reign. So he positions himself, brings the little changes he can, and he waits.

He does not betray them when corruption charges are being thrown at them because he has a bigger goal in mind. He thinks, even if he betray Congress now, maybe BJP would come into power, maybe even the 3rd front. Neither very exciting prospects. So he maintains a stoney silence and accepts the insults hurled at him both domestically and internationally. He continues to bid his time. 

Then things start to fall in place. Pranab Mukherjee, a heavy weight, is neutralised by being made  President. The PM brings back Chidambaram to the Ministry of Finance and gains some political backing for the reforms. UPA's own welfare policies create massive deficits and the economic growth forecasts continue to be downgraded. Things are looking grim. Corruption charges do not seem to end. The BJP has paralysed the Parliament. The pressure cooker is about to burst. All the public outrage is directed at the Congress.

Knowing that the time was ripe, the PM goes to Sonia Gandhi and offers the distressed Congress President solutions to her problems. Seeing some hope, she promises him full political backing. The PM is finally the stallion he was supposed to be.

He now has several projects in the pipelines. He wants to do as much as possible before 2014, when he must give up his seat. He will finally get to do something right.

This story may seem too far fetched to be true. I am not sure I believe it myself. I have no evidence to prove it. But then again, no one has evidence to back up any other version of the story either. All I am saying is maybe, just maybe, Dr. Manmohan Singh is the hero that India deserved, but did not need at that point (when growth was good). And so we hated him because he could take it. Because he was not meant to be a hero - he was meant to be a silent guardian, a watchful protector... A Dark Knight. (modified version of a line stolen from Batman: The Dark Knight)

Monday, 24 September 2012

PS - I'm sorry

Dear Dr. Manmohan Singh,

Let me begin by congratulating you on your latest set of reforms and also your new resolve for reforms. I am 100% behind you on both aspects.

I think the address to the nation was also a good move and long overdue, and once again I am in complete agreement with whatever you did say. However, I have some objections about the things you did not.

You asked the Indian public to persever and accept the price hikes due to the deficit. You asked the public not to get influenced by the lies spread for political reasons. You asked people to trust you and support you to get through these trying times. All of these are reasonable requests, but they are too late. 

If you had made this same address two years ago, it would have been met with cheers and the whole hearted support of the people. But now, your government, Sir, has lost it’s credibility. What did you do to adress that?

It is obvious that there is a lot more corruption embedded in our system then what is covered in the media. While ideally I would expect you to own up and apologise for it all, the least you could have done is apologise for the ones that have already been proven.

You should have apologised that under your rule the CWG and 2G scandal took place. You should have apologised for the fact that the coal mines were not effectively developed and utilised. You should have apologised that after 8 years of your rule, India once again faces the crisis which you compared to the one in 1991.

None of these apologises would have revealed any new damning evidence against your government. They have already been comprehensively proven and your government has already been blamed for them. While you may not have been personally involved in those scandals, they did happen under your rule and you should have owned up to your responsibility. Addressing these issues would have helped the public believe that you have turned over a new leaf.

Personally, I take offence that these issues were not clarified before you dived into your requests. The old air must be cleared. A good leader gives before he takes. Don’t treat us like fools who would not understand. Give us respect and we will return the favour.

Yours sincerely, 
Parikshit Kabra

I dream of Sibal

Note: Read Mr. Sibal's article on TOI by clicking here, for a better read.

My dream, a few nights back:

Me: Good evening Mr. Sibal. So glad you could join us for the ‘Tonight Show’ !

Kapil Sibal: I’m happy to be here.

Me: Lets get right into it, sir. Don’t you think that the Supreme Court and the CAG are clearly overstepping their mandate? What is their business deciding policy for the government?

Kapil Sibal: Well it is arguable. What you say is valid, but one must also question why these bodies have begun doing this now? The mal-practices in the allocations have become evident, both from the CAG report and the CBI investigations. When the executives leave such a gap in their work, it’s only natural that the other wings will fill up the vacuum. Thus is the nature of democracy.

Me: That is interesting. You seem to be defending them while much of the newspapers and politicians are attacking them.

Kapil Sibal: This is a failure of the media and our leaders. How is it that the scandal is being side-stepped and the mandate of the CAG is being discussed more frequently? Even if CAG has overstepped the mandate, what affects our country more, their supposed marginal invasion, or the fact that private enterprises, politicians and their relatives are minting money? It is a clear failure in prioritising.

Me: But saying that auctions must be held for all natural resource distribution is absurd! What if they start demanding that your Aakash tablet should be auctioned as well?

Kapil Sibal: Don’t be silly! The Supreme Court’s judgement clearly said natural resources. Is Aakash a natural resource? But even more importantly, I think there is a fundamental difference between when the government is dealing with the end consumer directly, and when they are dealing with an intermediary. When we are executing the former, we have a target population with clearly defined characteristics (such as wage, location etc) to whom we provide the goods in a non-discriminatory fashion. However, in the latter case, we are selecting some people out of a many and allowing them to use it for commercial purposes. How can you compare these two things?

Me: You make a fair point, sir. But still, isn’t the Supreme Court’s verdict to extreme? They say always use auction. Surely there is a need to leave some room for discretionary allocation..?

Kapil Sibal: Your two statements are not mutually exclusive. All the Supreme Court has said is that the method of auctions should be utilised. The design of the auction is left at the discretion of the Government and it’s executives. The government can put up clearly defined criteria that all prospective bidders must meet to take part in the auction or they could set-up conditions that all parties must accept after winning the bid. The point is that these guidelines should be clear and standardised so that all members in society, who qualify, get an equal opportunity to win the bid. This will ensure that the best candidate wins.

The fact is that auction is the only method, maybe besides a lucky draw system, that enables a completely non-arbitrary and fair allocation. Adding any form of arbitrariness will inevitably lead to corruption as the potential to make money in these industries are huge.

Me: But what happens when the prices increase for the end consumer due to the auctioning of the natural resources?

Kapil Sibal: That is a fair concern. However it is not being addressed correctly. We should not be saying, “the prices may rise, hence auction is not the right way.” Instead we should be asking, “how can we ensure the welfare of the consumer while keeping auctions, the most appropriate allocation mechanism.” Unfortunately no one seems to be asking that.

Me: Well let me be the first. How can we ensure the welfare of the consumer when using auctions?

Kapil Sibal: There are numerous ways. But lets start with the basics. 

Prices rise when there is less competition in the industry. A monopoly can set whatever price it may choose, as it knows that the consumers have no other option but to go to them. By increasing competition we give the consumers a choice and will force companies, which are trying to increase their market share, to decrease their prices.

If enough competition can be generated, by that I mean perfect competition, then the marginal cost of producing the service or good will be the price that the consumer will pay. However this is an ideal scenario and highly unlikely. But the closer we can get to this, the better it will be for consumers.

Me: But how will the investors cover up the money they have invested then?

Kapil Sibal: In a perfect competition, they cannot. But as I said, that is highly impractical. The companies will differentiate their products and try to keep some margins for profits. All competition will do is reduce those margins.

Me: But won’t this kill the industry? Who will want to enter when they cannot make any profits?

Kapil Sibal: No it won’t. Bidders must compute what margins they will be able to maintain, and thus the profits they will make over the marginal cost. Keeping this figure in mind they must bid for the natural resource. People who overpay will eventually have to change their business model and swallow the loss, or sell the resource to someone else who can sustain a business. These are standard market dynamics.

Me: So you are saying it is all about making sure there is competition. But what happens when such competition cannot be generated? Like in telecom for example, there are only a few players out there.

Kapil Sibal: Yes, that can be an issue. But tell me, where is the money going? It is going to the government. If the government is concerned about the welfare of the telecom consumers, they can provide subsidies to lessen the burden for the consumer. In fact, using this approach, you can target the subsidy for those who most need it.

Me: But why create this elongated process of money first being given to the government and then being transferred to the public, when instead the same result can be achieved by handing out the spectrum for free?

Kapil Sibal: If you hand out the spectrum for free, how do you decide who deserves to get it? You have once again come back to the arbitrary mechanism which simply won’t work.

As far as the need for the elongated process is concern, let us see who benefits how much from the ‘free allocation’ as you suggest.

A rich man will use his phone excessively and will be benefitted by the low prices more than a poor man. And what about the people who do not use phones at all? They are as much citizens of this country but do not benefit from the use of natural resources at all!

Now the two alternative methods are targeted subsidies or direct cash transfers. The tar- get subsidy approach ensures that the poor receive the benefit, while direct cash transfers will include the people who do not use mobiles.

Me: So you’re saying auction is the way forward?

Kapil Sibal: Churchill once said: “it has been said that democracy is the worst form of government except all those other forms that have been tried from time to time.” The same principles apply here. Although auctions have their short comings too, it is the best mechanism we have for now.

And then I woke up on the 15th of September to read Mr. Kapil Sibal's article in the Times of India....