Educated unemployed of India - the looming multitude

A recent article by CNBC's Neerja Jetley ('India's lost generation: A systemic risk?') laments that "Nearly 47 percent of Indian graduates are unemployable in any sector, irrespective of their academic degrees".  It goes on to lay the blame on the fact that "As little as 10- 12 percent of the 15-29 year-old age group in India receives any formal or informal training compared with to 28 percent in Mexico or 96 percent in South Korea".

I think the piece misses a couple of aspects.  First off, the problem doesn't start with lack of training in later-school years.  It starts with elementary education itself.  A World Bank report says that "44 percent of students in grades 2–5 in government schools cannot read short paragraphs with short ...language... Many ninth graders tested in two states using mathematics questions from an international survey had problems with basic arithmetic skills".  And this is no surprise.  With teacher skills & training (and qualifications! - talk of political interference there...) being what they are, that's the kind of student literacy rates which can be exptected.

Secondly, the article says "Theoretically, a nation with young demographic has lower dependency ratio..." and then goes on to describe how 'demographic dividend' doesn't work in India.  However, one additional aspect is that the premise itself may not hold.  Even if it's true that "In 2020, the average Indian will be only 29 years old, compared to 37 in China and the U.S., 45 in West Europe and 48 in Japan, according to India's Ministry of Labor and Employment", many such 29-year-olds do have a full family to support, with both ageing/aged parents and (courtesy early marriages, especially in rural areas) spouses & children.

The article concludes by saying that "The poor education standards are recipes for social problems as incidents of crime escalate".  But the escalating crime is not only caused by the poor educational standards.  It's also a symptom of the haves-have nots divide, caused by the same unemployability that plauges the system.

Unless urgent steps are taken to stem the rot in an integrated fashion, by attacking each and every factor in the entire chain of causes and effects, social tensions are only slated to increase, with predictable consequences for both law & order and institutionalized corruption, notwithstanding efforts to address one or the other symptom in an isolated manner.

Subsidies and all that...

The Arvind Kejriwal-led Aam Aadmi Party (AAP) recenlty gained power in Delhi and announced certain sops for 'aam aadmi' (common man) forthwith, without even waiting to prove their majority on the floor of Delhi Assembly with the support of Congress (or perhaps wanting to 'do it quick' before someone could pull the rug from under their feet!).  Commenting on the subsidies announced by the AAP Govt., esp. the one relating to power charges, a couple of respected former colleagues expressed themselves as not wholly in favour of such subsidies, broadly on the ground that it was a wastage of precious public resources.

I've a bit of a contrarian view on this (though perhaps still to consider all aspects). Why are direct subsidies necessarily seen to be bad when they're granted to the common man or disadvantaged sections. What about the very many indirect subsidies afforded to the privileged few? For starters, does anybody talk about the huge subsidies by way of Govt. houses given to public servants (just compare the market rents in surrounding areas to the pittance they've to pay the Govt.)? What about the almost 'everything free' life of our so called elected representatives (someone once came up with a calculation for an average MP - it came to millions!)? And we're not even talking of the disparity in opportunities afforded at the two ends of the scale of affluence, an indirect subsidy in itself - remember that someone born with a silver spoon in his mouth has infinitely greater opportunities to progress, against someone born in more humble circumstances.

The going wisdom, honed by the traditional wisdom and conditioning poured into all our minds since eternity, seems to be that metrics like fiscal deficits are affected only by the direct subsidies granted to the economically disadvantaged, while the indirect subsidies are manna from heaven! But just consider: where does the effect of the largesse afforded to the privileged few land up - perhaps on the same plate, just as direct subsidies do? Eventually, it'd seem that the same 'common man' ends up bearing the burden of fiscal deficit from his pocket, either by way of increased taxes (which he can't evade like a smart businessman, being subject to witholding taxes from salary - another subsidy asymmetry!) or erosion of savings due to inflation (while the solution for businesses is simply to jack up the prices of goods and services, protecting their marging).

One argument could be that the advantages accruing to the entrepreneurial class is ostensibly due to the operation of risk-reward equation: more the risk taken, greater the reward.  But at whose cost do such supposed 'entrepreneurs' (many of whom may be the old landed class, rent-seekers rather than true innovators) take such increased risk.  We only have to look at the subprime crisis for the answers!  Closer home, how many industrialists have really been made to pay with a reduction in their lifestyle after their businesses failed - word is that most of the risk is actually borne by the banks and financial institutions, while the super profits/rewards go to the 'promoters'.  And ultimately the tab for the inefficient (and sometimes downright corrupt) lending practices of public banks has to be picked up by the same common man!

So what's really the harm in the poor common wo/man being compensated at least a little bit by being granted some direct subsidies. And make no mistake - the common wo/man is yearning for it!  With the information asymmetry slowly withering away, mainly due to electronic media and especially internet, aspirations are rising all around.  And we the middle class have started to feel the pinch lately, much later (in terms of social development) than many other developed societies - labour wages from farms in Punjab to construction sector in Mumbai have been rising due to the 'NREGA' effect (supply of labour stemmed due to rural employment scheme in their villages), as have the salaries of domestic helps, many of whom used to come from such rural areas.  One pernicious effect brought on by the rising aspirations has been the unsavoury social incidents like honour killings and worse, epitomising the 'clash of two worlds' (mainly rural and urban), where economic conditions and mobility change but social mores do not keep pace.

When some people talk about wastage of public resources in subsidies, the underlying thought seems to be that since the resources are collected from the middle classes (not counting the really rich who have ways of either 'passing on the burden' or evading it!), they should be spent on the same classes.  However, taxation theory also says that the objectives of taxation are not only public/common welfare, but equalization of wealth to an extent by transfer of resources.  We wouldn't want forcible and sudden transfer of wealth (like Dr. Zhivago's house in 1920's USSR being marshalled for housing the poor!), would we?  So taxation and grant of subsidies seem to be the other way in which this is done!

I say subsidies "granted' and not "availed", consciously, because as anyone with an iota of exposure to real life knows, here the lion's share of even those direct subsidies is cornered by many of the same privileged classes who also get a plethora of indirect subsidies, by way of rampant corruption and administrative overheads.  The public distribution system (PDS) of India, which provides 'ration' food for the common man, is a prime example of leakage, as is the MGNREGS (the rural employment guarantee scheme).  The real debate should perhaps center around such inefficiencies and corruption around the subsidy schemes.

I believe AAP's recent electoral success is due to the fact that the other political formations have lost touch with these realities at ground level. And this applies especially to Congress, full of lawyers and economists whose only occupation seems to be to fulminate over esoteric things like balance of payments, monetary & fiscal deficits, market/& FII sentiments, 'confidence of the international community' (whatever that means!) and the like. Issues which don't make sense and not an iota of difference to the life of the common wo/man, who's more concerned on a day to day basis about balancing his/her household budget and keeping his/her head over water.

I fervently hope the common wo/man relegates all such political parties/formations to the dustbin of history and brings in more AAP-like people who're in regular touch with ground realities. But that's only a hope - I'm realistic (or cynical!) enough to realize that there are a host of factors like caste, religion, musclemanship, corruption etc. at play to thwart such a grant vision and perpetuate the status quo. My remaining hope is that perhaps AAP's victory would spur some in the current bunch to see the writing on the wall and take up common people's issues.  Perhaps a small start has been made in this direction by Sanjay Nirupam, the Congress MP, who's now demanded that Maharashtra Govt. should also look at ways and means to reduce power charges the same way that AAP has done in Delhi. Amen!

Backing the wrong horse(s)...

The headline news (or "breaking news", as most news channels are wont to call it!) in almost all Indian newspapers today is how Manmohan Singh, taking over Finance ministry after Pranab Mukherji resigned en route to the President House, choose to meet his old 'groupies' Montek Singh Ahluwalia and C Rangarajan for a start.  And how this signalled great things to come...

It's striking how we Indians as a people, raised as many of us are (or at least were, till a couple of decades back) on mythological stories, are highly susceptible to the 'history syndrome'.  At the slightest pretext, whenever we even get a hint of an incident (or even a persona) resembling anything that has happened any time in the past - right from Rama's time to Krishna's and all the way till the end of 20th century and everything in between - we are wont to clutch at the straws of history/mythology and get our danders up 

(or down, as the case may be) basis the similarity of circumstances.  Little do we realize the dynamic nature of history - things once gone are hardly likely to come back, not in the same form at least.  Even if we could at least learn something from history, it'd be of some use; but no, we're content with just being nostalgic and all rosy eyed...

The over-exhuberance with Manmohan Singh taking charge of Finance ministry, and pulling along his 'old' team on the first day, is another demonstration of the same syndrome.  Now, nobody has got anything against Dr. Singh - he's a decent enough man, who's come up the ladder by dint of his technical/academic brilliance.  But how in the world is this 'opportunity' - of being in charge of Finance ministry again (though there were snide remarks earlier that even as PM he preferred to deal with Financial and Economic issues rather than the wider ones, including political) - supposed to add to his ability to deal with the country's current economic situation any more than what he was already able to do as PM?  


And are we really sure he 'understands' the current world/economic paradigm the same way he did 20 years back?  Perhaps he does (being a brilliant economist himself), but there's a world of difference between understanding something and doing, or even being 'allowed to do' (ref. all the the talk of 'coalition dharma'), something to help the situation.  Do we expect that Dr. Singh would just pull out his magic wand (of 1990s vintage!), say "Abracadabra", and all our economic ills would just vanish?!  And that too when the wand itself has rusted quite a bit in the intervening 20 years.  Call it 'old wine in new bottle' or whatever you may, the reality is that Dr. Singh may find himself as flummoxed (and hand-tied) in dealing with the current situation as FM (esp. if he chooses to use 20 year-old methods) as he has been as PM.

As for Montek, the guy appears to have actually deteriorated in his outlook over these 20 years.  Part of the blame must be put in the

space he finds himself in - as head of a communist-style 'apparatchik' body lording over Central Govt. resources and granting 'doles' to provincial govts.  Never mind that the resources are raised in the same provinces (and then 'appropriated' by the Centre and part of it funneled into the black home called Govt. bureaucracy)!  And never mind whether the money so doled out actually reaches the target populations.  The fact that Montek has got totally disjointed from ground realities is borne out by many indications, one being his view that a 'normal' person an live on Rs. 30 a day (presumably, if that 'normal person' doesn't have to spend Rs. 3 million on a couple of toilets, of the kind recently built in Montek's fiefdom Yojana Bhawan), while 'Montek-ji' himself can fly around the world on 'official' tours at a cost of crores.  If ever there was a contest for the best 'armchair economist' (living within ivory towers), Montek will qualify without even running for it!

As for Rangarajan, the best one could say about him is that he prefers to 'stick to his knitting'.  As Governor of Reserve Bank of India, he excelled in dealing with esoteric things like repo rates, CRR, (theoretical) inflation trends and such like.  And one suspects he has continued to restrict himself to dealing only with faceless numbers rather than real people.  Probably he can talk at length on the shape of money supply in the economy, without even a hint of what that 'money' means to the person on the ground trying to survive with the same (or even reduced) 'supply' of it while prices of everyday items keeps going up and up and up.  Something that not only doesn't hit people like Rangarajan, insulated as they are from any level of price rise, but is sanitized by the same people into faceless concepts of 'inflation' ('double dip' or not), 'stagflation', 'recession' and the like - much more palateable to deal with than the ugly realities of abject poverty and penury at both urban and rural levels.

Is it any surprise that with such a merry bunch at the helm, our economy is in the doldrums.  These are the people who, even when they get themselves up to do something at last, start talking about dealing with 'investor sentiment' and 'market trends', not even making a passing reference to the plight of the same 'common man' to whom many of them have to go every five years.  As if their first accoutability lies with the 'international community' and not to their constituents.   Well, talk of investors and market all you like, but at least explain to the common man how doing something to improve these is likely to (it's only a possibility after all, not a certainty) lead to a better deal for him.  


A classic example is how the Govt. machinery dealt with the resistance to foreign investment in the retail sector.  On paper, a whole lot of downstream benefits could be envisaged, from better realizations for farmers to more competitive prices for the consumers, eliminating middlemen from both ends of the chain.  But no, the Govt. preferred to talk only of how permitting this would lead to a great improvement in investor sentiment (even as many farmers' bodies got wise about the potential benefits, and chose to take a stand counter to the agitating trader community who seemed to have a bigger ear of the powers that be across the political spectrum)!


And you know why they wouldn't talk about the common man's reality on any issue?  It's because, in his heart of hearts, in the privacy of his leir, any intelligent man (discounting the idealistic fools), either in the economic or in the political space, knows that the machinery and mechanism which has been built up since our independence (and even before) is so rusted and moth-eaten by corruption that come what may, only a very small portion of economic benefits actually reach the common man for whom it's meant.  


And that applies to 'trickling down' of any economic & social good under the sun - unemployment benefits (the NREGS chain riddled with corruption at all levels and leakink like a sieve), education (whole armies of teachers drawing salaries from Govt. but not setting foot in the dilapidated rural 'schools'; why do you think there are riots every time a recruitment drive for teachers or policemen is held - because it's a licence to draw a pay withouth working & thus 'loot of the treasury'), health (primary healthcare centre workers playing truant, just like their brethren the teachers), industry (e.g. mining, a daylight robbery industry the likes of which are alleged to be driver of Naxalism), even law and order (a special case - a force tied down to its British-era 'legacy' as a tool of repression in the hands of the powers that be).

Faced with such 'insurmountable' challenges of economic development to benefit the common man, what do smart men like Manmohan, Montek, Rangarajan, et al do?  Why, they keep tinkering with this or that 'rate' or 'indicator' a bit this way or that way, while making all the right noises at Davos and Mexico, if only to ensure that after retirement (if it ever comes, for this lucky group) they have plenty of offers from the 'international community'.

Is the situation totally hopeless?  Is there not even a glimmer of hope?  I believe there is.  Just that we've to learn, as a country and people, to stop putting our stock in hopeless personages.  A lot has been said about Indian 'jugaad', the proclivity of the Indian people to get around any roadblock by using 'whatever works'.  Some negative comments have also been made against the 'jugaad' mentality - legitimate complaints that this mentality is condoning social/economic ills, encouraging corruption and letting people get away with murder.  However, I believe it's the Indian ethos of micro-level entrepreneurship (in the widest sense of the term), whether called 'jugaad' or something else, which'd eventually help us rise above the conundrum in which we find ourselves.  And that would probably happen in spite of, not becuase of, any shenanigans indulged in by the holier-than-thou armchair economists and technocrats.

There is a passage towards the end of 'War and Peace' where Tolstoy puts down the realization that it's not great kings and emperors who win battles, but the soldiers on the ground whose courage or cowardice on a given day and in a given battle actually decides the fate of that battle (and eventually the war).  This resonates closely with the timeless Indian classic Bhagvadgeeta which says while being engaged relentlessly in work, one shouldn't even think that things come about because of his efforts ('maa karmaphalheturbhu...').  If only the self-important 'rulers' like Manmohan, Montek & Rangarajan would get the import of this philosophy and focus on 'getting out of the way' of the common man as he goes about building his dream with his own two hands...

The culture of 'Jugaarh'

A recent article in New York Times described how entrepreneurs in the city of Gurgaon, near the Indian capital city of Delhi, had risen to the challenges faced due to the utter lack of basic infrastructural facilities.

While presenting a balanced and realistic picture, one interesting aspect in the article was that it seemed to eulogize and romanticize, in tune with the growing tendency across India and the World, something called jugaarh, the ability of people in India to rise above their circumstances using any means available. This is lately becoming a subject of case studies across campuses, here and abroad! 

What this romanticization may be doing (among other effects) is: (

a) Absolve/let off the Government of its primary duty to provide and maintain essential services like roads, water, power, minimum nutrition and law & order; and (more damagingly perhaps) (b) encourage an unhealthy lack of respect for law, the manifestations of which we can see in everyday life in the form of traffic mess (nobody seems to minds the traffic policemen, many of them prone to bribes), infractions of laws & regulations (see the massive 2G telecom spectrum scam still unraveling), people taking the law in their own hands (look at the 'khaap panchayats' - village-level kangaroo courts), and myriad other things. 


Publicly, we all like to criticize these things.  But at pesonal level, we indulge in the same unhealthy practices whenever faced with the slightest bit of discomfort - paying bribes when required, throwing our garbage outside in the open, taking a 'wrong side short cut' (against oncoming traffic!) when faced with traffic jams. 


As a first step, for India to reach the 'tipping point' of graduating into a 'wholesome' democracy, it first has to put in order its delivery of the minimum basic infrastructure and services to all citizens.  Without this, the differences between the haves and have-nots (both in terms of facilities & wealth, and the means to break the law with impunity!) may only get accentuated, reflecting in the rising tide of more of the types of 'class clashes' and individual crimes we're witnessing today.

The real role of politicians (the 'ritual of politics')

While commuting to office this morning, heard on news that a certain national office bearer of a political party (incidentally, the one everyone looks at as almost the messiah, mostly courtesy the lineage) had said while addressing his party workers in a state (again incidentally, one going for polls in the not too long future) that they should keep an eye on the implementation of Central development programs in their respective areas. Taking a cue, the head of the party in that state (perhaps again incidentally, daughter of a party stalwart, long gone) announced that she'd form district monitoring committees for the purpose.

Set me thinking. Why do these hallowed people have to emphasize this simple need to their workers? What is the basic purpose for which grassroots (again a much abused term, now even part of the name of another political party which grew out of this mother party) politics was 'invented'?

To a simple mind, the very basis of representational politics was the 'upward' communication of the aspirations and needs of people living in far flung places to powers that be, and the reverse 'downward' communication of the response (by way of development programs or whatever) to those same people through the channel of their representatives. And that would've been the basic driver for the whole movement across centuries to gain universal franchise (right to vote), something which people across nations fought for and won after a long & hard struggle.

But has this right really empowered the people, especially in an under-developed/developing country like India? It seems the only time that people get to exercise their right & leverage over the political system is during elections. And here too, the process gets vitiated to a large extent by factors like strong-arm tactics, identity politics, and sometimes downright fraud. Even where these factors are not at play, the constituents hardly get any real opportunity to get to know the candidates and understand their outlook and approach, within the short time that the candidates visit the constituencies before the elections. So people who vote (and many don't!) do so either on the basis of identify politics (including for 'dynasties', political or otherwise) or in support of a specific political party. And the manifestos of most election parties are such elaborate documents (making almost identical promises!) that a lay voter is hardly in a position to assess the party's ideology or program directions, and s/he has instead to go by heresay (including those propagated through press and electronic media - and not all independently, as the recent cases of 'sponsored' coverage revealed).

So what happens once elections are over? An eerie calm descends! Having extracted their moolah (that is, votes), the politicians go back to their high abodes, some to state/country capital as elected 'representatives', and most don't look back on the constituencies for another five years (or till when the next elections happen). The elected 'representatives' continue to draw their remunerations (mostly for disrupting the proceedings at the assembly/parliament), and also their (ironically named) 'constituency allowance', travel allowances (ostensibly for visiting the constituencies - which many don't spend as they travel gratis while the railway officials look the other way out of fear or favour) and sundry other moneys, but those who actually visit their constituencies and listen to the people can perhaps be counted on fingers.

Only once in a while, the voice of a politician is heard on matters concerning his/her constituency. This is usually when some calamity has struck or some gross injustice is revealed, for instance people dying of hunger in some districts of a state like Orissa (a regular happening). Then the elected 'representatives' are heard telling the media that this or that thing should have been done for the welfare of the people, but was never done. Begs the question: then what the hell were you doing all these years? Did you take up the issue with those who could do something about it, all through the chain, from the local administrators all the way up (that is, beyond slapping around a bureaucrat or currying personal favours)? And if you really raised the issue and it was still not addressed, did you consider this as an utter lack of your effectiveness (to 'serve people', something you promised during the elections) and consider resigning your post of elected 'representative' on moral grounds? But this is being naive - why should s/he let go of his/her fat salary, allowance and sundry perks (legal and illegal) just to benefit some wretched souls, who would have died anyway!

The problem (or the symptom thereof) is that the 'ritual of politicking' seems to have supplanted actual politics at all levels, which is why 'politics' ('invented' ostensibly for benefit of people) has gained such a bad name [this is akin to the rituals of religions, where something which was supposed to bring people closer to God or their spiritual core has degenerated to just an observance of certain rituals mostly]. So when some people join 'politics', perhaps as grassroots workers, all they think about is what they can do during elections to help their then leader win, and thus curry favours and move up the 'value chain' of political aspirations, all the way up. The basic purpose of politics, that is understanding and communicating local needs upwards and ensuring those needs get fulfilled by appropriately designed and implemented development programs, doesn't enter their equations at any stage. So till such time that a culture evolves where it is ingrained in a political worker (at whatever level) from day one what the basic purpose of 'politics' is, things would continue to run in the same way.

But I'm again being naive. Evolution of a culture, or for that matter anything to do with human endeavour, seems to depend much less on noble thoughts and much more on the alignment of incentives (taking cue from a different plane, the current economic crisis, where the subprime crisis in US is supposed to have been caused due to a misalignment of incentives all through the chain of housing mortgage management, from originators to aggregators to investment bankers and beyond). Till the time people know that they are accountable (that they would be held responsible) for acting in a certain undesirable manner, and conversely they would be rewarded for acting in a manner which is likely to lead to greater public good, they'll continue to act in a way they are accustomed to act since time immemorial. This needs a system of appropriate rewards (incentives) and punishment (disincentives).

But can we really even hope for such a system to evolve, in an environment where even the existing system is regularly bent and broken by people who have the power, either physical or money?