People's Languages Key For Growth and Eliminating Inequalities

French economist Thomas Piketty's celebrated book, 'Capital in the Twenty First Century', has been a much discussed one since its first publication in 2013. The book discusses in depth on the subjects of generation and distribution of capital (or wealth), and analyses their causal factors, relying mostly on historical tax data and other records of several countries, spanning over two to three centuries. Based on these records Piketty analyses distribution of wealth, historical ups and downs in the economies of various geographical regions, economic inequalities, and also discusses various solutions that can address inequalities - both within nations and between them. In this article we will examine Piketty's analysis of global distribution of wealth across nations and major geographical regions, the resulting inequalities and their causal factors, and see what lessons we can take for a developing country like India.

In economics, Gross Domestic Product, or simply GDP, is one of several important parameters used to measure a country's economic development. It is the total output of all goods and services within a nation, in a given year. There is also another important parameter to measure economic development - per capita GDP. Simply put, it is the GDP of a nation divided by its total population. Thomas Piketty makes some important observations on historical global distribution of wealth using per capita GDP as a parameter, and analyses its possible causes. He chooses two continental blocs, Europe-America and Asia-Africa, the former with mostly developed economies and the latter having mostly under-developed ones, and observes historical economic inequalities, starting from 1700s. Here is a graph of the percentage of the global average of per capita GDP of both the continental blocs:



With a per capita GDP share of 150% of the global average in the 1700s, the Europe-America bloc, shows a consistent rise with time. As the West goes through an industrial revolution, the Asia-Africa witnesses a fall in the per capita GDP share. From the 1700 onwards the two lines show a consistent divergence from each other with the developing world trying to pull back only from the 1990s. Convergence of these two lines now, does not appear to be all that complex after all. The developed nations already have enough capital, and they can invest in the developing economies that are in need of money. Apparently, it is win-win for both, as the developed countries can profit from investing additional capital they already have, and the developing countries can benefit by utilizing the capital for production and output. Not so easy, says Piketty.

If nations have to achieve true economic development it is important for them to build highly skilled labour force that can provide top-quality goods and services, with which they can also compete in an open global market. So, it is important to keep scientific and technological skills of the population on the rise. Piketty cites the examples of economic development witnessed by Japan, Taiwan, South Korea, and also China, in the recent years. So, if these two lines on the graph have to really converge, it is important that the under-developed nations develop skills of their population to be able to effectively benefit from the opportunities of the open global market. Piketty uses the term 'knowledge diffusion'. So, by the detailed analysis of historical data, Piketty comes to the conclusion that development of skills of the population, is of prime importance, and investment in quality education, especially in science and technology, is key for development of poor nations.

So, it follows that poor nations, like India, will benefit from building strong primary and higher-education systems. So, how strong are the education systems in India? Is india headed towards building stronger education systems that will help drive development? The answer, is a clear NO.

It has been proven beyond doubt that mother tongue based education is most effective in learning. Studies conducted around the world have time and again proven this fact. UNESCO not only recommends mother tongue based education but also considers it a right of every child. It is important that governments focus on building strong primary education systems in the mother tongue, and also strive to build institutions of higher education in the language of the people. This will provide a strong foundation towards achieving 'knowledge diffusion' that Piketty talks about. Successive governments in India have done trifle little in building higher education systems in people’s languages. Unfortunately, educationists, intellectuals and civil activists too have failed in building a narrative in this regard.

Industrialization alone, without much focus towards knowledge diffusion, has its limits in achieving economic development. Building a highly-skilled labour force is critical, and an education system based on people’s languages plays a key role, as is the case in the examples of countries like Japan, and South Korea.

But India, unfortunately, seems to have succumbed to a notion in education that is pulling it in the opposite direction.  The narrative that the English medium education is a panacea has successfully hijacked the society into believing in the myth that English medium is the only way to achieve success in the era of globalization. It appears that to be successful, people have to cross the English language barrier, which only a small percentage can manage to do. A huge mass of people aspiring to be part of the anglicized elite that the system has built, is still deprived of quality education. So, what we really need is a far-sighted focus towards building strong primary education systems, followed by top-notch higher education systems, in our languages.

It is important to note that Japan and South Korea that are part of the Asia-Africa bloc managed to close the gap with the West by building strong mother tongue based education systems. Needless to say, nations like Britain, France and Germany that witnessed development with the industrial revolution, and countries like Sweden, Denmark and Finland that caught up with them later too developed on the foundations of education systems in the languages of their respective people. And it is not a co-incidence that nations in the Asia-Africa bloc that have struggled to achieve economic development despite investments flowing in, have failed to build education systems in their languages.

Lessons for India are very clear. Industries are important, but there is no way we can eliminate inequalities and reach the levels of development achieved by the West without education in people's languages.

Smart States Are Needed, before the Cities Turn Smart

- By Rohith Batni Rao
Pic source: indiantollways.com
The current NDA government in India has been making quite a lot of noise about the hundred smart cities that it wants to build. All this noise is uncalled for in a federal democracy. In fact it appears to be signaling the formation of an ecosystem of governance where the States are conveniently expelled from their place between the Centre and the people!

Smart Cities Council, a portal where global companies and city stakeholders discuss smart city ideas, hosts this infographic that explains the nitty-gritties of smart cities. According to it, a smart city is that which is nearly self-sustenant and whose public policy and data are transparently available to people for scrutiny and other uses.

The idea of smart city also strives to make legislation and policing minimal by letting advanced technology assist, if not replace them. More importantly, at the heart of these smart cities, is the idea of governance by least hops and the idea of self-rule. For cities in India, the closest tier of an elected government is either a municipality, corporation or the panchayat. The central government is far-fetched and impractical. Attempts like these being made by the Urban Development ministry in GoI, therefore, are designed to fail.

If self-sustenance and local governance are the mantras for smart and efficient living in the modern world, then Smart States, not cities are what India needs primarily and urgently. These smart States would have to be more self-sustenant, self-reliant and self-driven than they are allowed to be in India today.

Having some cities under the direct regulation of the central government burdens it with additional fiscal responsibility but brings in revenues that the States need and deserve more, thus denying those cities and States the attention and resources they need and deserve. Given the nature of horizontal fiscal devolution prevalent in India, such centrist ideas of building cities could siphon funds away from well performing cities into the non-performing, yet enumerated cities. This corrupts fiscal performance equation of States and also creates an unfair and uncompetitive environment in the nation.

Amidst all the diversity in India a State is the real unit of governance that needs to turn smarter, not the city. It is a smart decision to respect the diversity and embrace the challenges it offers, for a solution agnostic of diversity is not smartness, it is brutal rudeness. That is the real federal way of imbibing smartness, for smartness of a democratic and diverse nation like India really lay in its Federalism.

Governors' Post in the States of India, a Colonial Legacy

Warren Hastings, the first Governor General of Bengal.
Pic source: www.artgallery.nsw.gov.au
Ever since the BJP led NDA government took control at Delhi last year, there were words doing rounds that UPA appointed governors will be asked to go. As things evolved, a few of the governors voluntarily stepped down while a few others locked horns with the union government over their transfers. Looking at these events one can’t resist thinking whether such an anti-federal post as the Governor is really necessary.

History of the post of Governor
A Governor’s post has a colonial history. British used a post called resident to boss over the princely states as well as the presidencies of India. The resident post was not unique to India, but was present across geographies ruled by British (as well as other European colonialists). This wiki excerpt elaborates on the role of residents and how they were chosen in the yesteryears:
Some official representatives of European colonial powers, while in theory diplomats, in practice exercised a degree of indirect rule. Some such Residents were former military officers, rather than career diplomats, who resided in smaller self-governing protectorates and tributary states and acted as political advisors to the rulers. A trusted Resident could even become the de facto prime minister to a native ruler. In other respects they acted as an ambassador of their own government, but at a lower level, since even large and rich native states were usually seen as inferior to Western nations. Instead of being a representative to a single ruler, a Resident could be posted to more than one native state, or to a grouping of states which the European power decided for its convenience. This could create an artificial geographical unit, as in Residency X in some parts of the British Indian Empire.
Power held by the Governors in the Indian Union
Pic source: wikipedia.org
Let us have a look at the recent Governor appointees to the state of Karnataka – Mr. Hansraj Bharadwaj, a former congress party member, appointed during the UPA regime; Mr. Vajubhai Vala, a former member of the BJP, appointed as the governor within 100 days of the NDA government taking over at Delhi. Looking at this pattern, it becomes clear that the methods of choosing governors hasn’t changed much since the British time. Originally claimed to be a post that ensures continuance of government at State level, this institution of governor defined in our constitution appears to be mostly used by central governments to meet their political ends.

The political leverage aside, the Constitution of India has given certain arbitrary powers to governor, though a governor is not directly elected by the people of the respective State. Article 163(2) from the Constitution :
If any question arises whether any matter is or is not a matter as respects which the Governor is by or under this Constitution required to act in his discretion, the decision of the Governor in his discretion shall be final, and the validity of anything done by the Governor shall not be called in question on the ground that he ought or ought not to have acted in his discretion.
The key takeaway from this article is, a Governor’s action shall not be questioned. This exposes a fundamental flaw, for there must be no person in a democracy who is immune to judicial scrutiny.

In Karnataka as well as other states of India, no matter who the people vote to power, the top most decision making powers reside with the one loyal to the establishment at Delhi. Positions occupied by appointment having greater powers than the elected representatives is something that doesn't gel well with the democracy.

The Governors, sometimes so disconnected from ground level realities, tend to look at all States uniformly. This approach stands out especially in linguistic matters, given the linguistic grounds for State formation in India. Within days of his appointment as governor of the state of Karnataka, Mr. Vajubhai Vala made a statement that he could manage his work in Karnataka through Hindi. This statement of his is a display of his disconnect from the people of Karnataka.

(This piece had originally appeared in thefederalist.in)

Larger Linguistic States Are Important for Democracy in India

source: blogs.lse.ac.uk
Over the past few months, there has been increased talk of dividing the state of Karnataka into two separate states. The division being talked about might result in two entities, the northern part of Karnataka and the southern part of Karnataka. Interestingly, all this talk is emanating from the sitting MLAs belonging to the two political parties that call themselves as 'national parties', the 'Indian national Congress' and the 'Bharatiya Janata Party'. Mr. Umesh Katti, sitting MLA from the BJP, and Mr. AS Patil Nadahalli, sitting MLA from the INC, are the two gentlemen who are at the forefront demanding separate statehood for the northern part of Karnataka.

Shift in the balance of power
While there is a lot of noise about smaller states being good for development, one has to be careful and consider the shift in the balance of power such division of the states is going to result in. The citizens of India will inevitably have to grapple with such an imbalance, if the larger states were to be further divided.

Why is balance of power important?
This is a question of democracy itself. One of the main reason why democratic practice has been successful across the world is, because of the development of a system of checks and balances to ensure that the political power is dispersed and decentralized. Democracy is a system built on the deeply held belief that government is best when its power to abuse is curbed and when it is held as close to the people as possible.

Let us now understand the current distribution of political power in the Indian Union, and the problems that are inherent under such a distribution.

Degree of centralization in the Indian Union
The power of the states and the Centre are defined by the constitution and the legislative powers are divided into three lists

  • The union list - consists of 100 items on which the Union Government can legislate. 
  • The concurrent list - consists of 47 items on which the state governments can legislate but the Union Government vests the power to override the state laws.
  • The state list - consists of 61 items, on which the state governments can legislate. 

While the distribution of power is heavily tilted towards the Union Government in the ratio of 147 to 61, the articles 352 to 360 of the constitution contain provisions that tilt the balance of power all the more towards the Union Government. According to the Article 356 of the constitution of India, states must exercise their executive power in compliance with the laws made by the Union Government. Article 357 calls upon every state not to impede on the executive power of the Union within the states.

What problem can over-centralisation create for India?
With political power centralised at Delhi, the linguistic groups that carry clout at Delhi always have a larger say in policy matters. As was evident in the recent decision by the Union Government to reduce the import duty on raw-silk, the silk weavers from the state of Uttar Pradesh were benefited, while the silk farmers from the state of Karnataka were negatively impacted. The Union Government of India had to give in to the lobby from Uttar Pradesh, at the expense of well-being of the farmers from Karnataka.
Such policy-making inevitably brews resentment among the negatively impacted groups of people. Resentment among the citizens is a problem that no state can ignore.

With states reduced in size, the capability of the states to resist (or even reverse) the policies that impact their people will also reduce. By moving to split the larger states into smaller ones, and by continuing to run the administration in a centralized fashion, India does not seem to acknowledge the importance of balance of power. Larger linguistic states provide the much needed counter-weight to create the balance of power, and for the democracy to thrive. If you take out the counter-weight, all you have is imbalance, which can only lead to instability.

International Silk Route for India Is via the States

Source: www.thehindu.com
The farmers in Karnataka who rear silk worms are feeling the heat of cheap silk imports from China. The reason for this sudden surge in imports from China is, reduction in import duty on silk from 15% to 10%. This change in import duty was a decision of the Union Government of India.

As per this newspaper report, a delegation consisting of a few of the ministers from the Karnataka state government and all the MPs from Karnataka met several ministers of the union government recently, urging them to restore the import duty to earlier levels. As per the report, over 11 lakh farmers in the state of Karnataka have been impacted by this decision. Whether the Union Government decides to increase the import duty on silk to earlier levels or not, remains to be seen.  However, this episode in which the largest silk producing state in India felt the heat of cheaper Chinese imports and which made the representatives from the state to rush to Delhi seeking an intervention, tells a thing or two about the federalism being practised in the Indian union.

Should Delhi be taking a decision in this regard?
There are several farm produces that are mostly produced in only one state of the Indian union. Any decision impacting such a farm produce must be taken by the government that is closer to the people who toil to make the produce happen. For instance, any decision impacting coffee or silk in any way, must come from the government of Karnataka. The decisions which do not originate from the government that is closer to the people, will only lead to problems that call for fire-fighting measures later. Decisions by the Union Government sitting at Delhi without even building consensus among impacted states, will lead to such a goof up.

Any reversal in the import duty impacts India's image among the international trading community. India will come across as a nation which is inconsistent with its policies. Non-reversal will bleed the farmers inside India. Why has the union government gotten itself into such a fix? Centralized decision making process which is far removed from the people is the reason. It is time India takes federalism seriously, and implements it in true spirit.