Editorial / Opium of the intellect
Bengal’s economic survival
The Telegraph Diary
Letters to the editor

 
 
EDITORIAL / OPIUM OF THE INTELLECT 
 
 
 
 
It is not often that a group of serious and well-known economists give up their academic pursuits and spend their valuable time to suggest ways in which their home state can improve its economic performance. The Telegraph today carries on this page a remarkable document signed by nine Bengali economists most of whom are now teaching in major universities in the United States. One overriding concern has involved them in the drafting of an economic manifesto aimed at West Bengal’s revival. The manifesto is politically and ideologically neutral because it speaks to both the contenders for political power in West Bengal. The neutrality is noteworthy because economists as a tribe are known for the divide between free marketeers and planners. The coming together of economists ranging in age from thirty to sixty can perhaps be read as a sign of the love they share for their homeland. The timing is obviously deliberate. Despite its academic tone and content, the document is a cri de coeur because what has stirred them is the plight of West Bengal and what they hope for is the state’s greater glory.


This coming together of nine bright minds has not contributed to the document’s strength. The search for a consensus, the effort to put forward something which is unobjectionable and beyond reproach has made the document utterly trite. It is stricken by the crisis of consensus. Not an eyebrow will be raised by any of the statements made by the nine wise men. Who will disagree, for example, with the statement that “the state should aim to do vastly better in education — both primary and advanced’’? The crucial question is surprisingly avoided. How is an advance in education and the pursuit of excellence in higher education to be achieved? Should education be opened up to private funding? Should Calcutta University be decentralized? Should Presidency College be brought out of the clutches of the government and the university, its present staff reverted back to other government colleges and Presidency allowed to function as a deemed university with powers to recruit its own faculty, fix its own syllabi and methods of teaching and award its own degrees? These are uncomfortable questions, all relating to policies and without addressing them any statement of strategy is an exercise in futility. 

The problem is that the document is full of such statements of pious intent with no policy prescriptions. Infrastructure should be improved. Yes, of course. But how, through private capital or state subsidies? Work culture should be improved. Again no policy is proposed. The job of the economist is to suggest priorities and allocations especially where resources are scarce. The document avoids doing this and is thus bereft of any sharpness. It says everything yet it says nothing. That poverty should be eradicated is a proposition which both Milton Friedman and Karl Marx would accept. But one doubts if they would agree on the means to achieve this. The economists would have served themselves and their state better if they had spoken their minds. One suspects that individually all of them have answers or approaches to the questions posed above. Unity has blunted clarity and originality.

There may be broader lessons here. Bengalis like the feel-good factor: they are haunted by the fear of controversy. They think that to be provocative is to be too fashionable and therefore anti-intellectual.The result is an anodyne document like this one. The assumption of neutrality is a statement of innocence. There is the belief that if good and wise things are said, people and politicians will listen and follow. It is an attempt to go into the real world without stepping out of the ivory tower. This and the resulting dullness make one sad. The Bengali intelligentsia deserved better from some of its brightest sons. The document brings to mind the comment made by a left economist on a book by the most famous of all Bengali economists: “Electra turns into banality’’. This applies to the document except that the emphasis will be on the second of the two terms. Banality is the bane of Bengalis.
 


 
 
BENGAL’S ECONOMIC SURVIVAL 
 
 
NINE BENGALI ECONOMISTS SET AN AGENDA 
ABHIJIT BANERJEE, PRANAB BARDHAN, KAUSHIK BASU, MRINAL DATTA CHAUDHURI, MAITREESH GHATAK, ASHOK SANJAY GUHA, MUKUL MAJUMDAR, DILIP MOOKHERJEE AND DEBRAJ RAY
 
 
While the results of the state election are still awaited, we would like to urge whichever party or group of parties that forms the next government to commit to a coherent economic programme. In recent times, public opinion, cutting across the ideological spectrum, has centred around the need for economic revitalization of West Bengal, especially in industry, as the key to solving many problems that currently afflict the state. It is good to start by evolving a consensus concerning the root of these problems. While political parties may differ with regard to appropriate policy responses, we believe there is some common minimal economic programme that should act as a benchmark for any coherent approach. There are two reasons for this. 


First, a small core of economic principles ought to be common to all political parties — for the simple reason that in the long run good economics is good politics. As the people benefit from the fruits of progress, the political parties that make this progress possible are rewarded and returned to power repeatedly. And economic progress requires a stable commitment to economic policies, in order to encourage long term investment flows into West Bengal. However, political parties tend to become obsessed at election time with short-run goals, which improve their chances in the immediate polls, at the expense of their long term staying power. 

Second, there is a fair degree of consensus among economists regarding the ingredients of a successful long term economic strategy for the state. In the current climate of globalization, West Bengal will have to build on its innate strengths — especially its human resources — to attract sufficient private investment in order to spur growth, create jobs and raise living standards across the board. The current international economic environment, particularly the worldwide demand for skilled labour conversant in English, provides a unique historical opportunity for West Bengal to achieve high growth within the next decade. 

Both political parties and citizens would benefit from a clear statement of the key ingredients of a successful long term economic strategy. Without going into excessive detail, it will be most useful to outline five principal priorities that should form the core of such a strategy.

First, the state should aim to do vastly better in education — both primary and advanced. While Bengal has performed better than the Indian average in terms of improvement of basic literacy over the last decade, the absolute rates still remain low compared to many other Indian states. It is important to set our targets much higher, aiming to achieve a literacy rate of 85 per cent by the year 2010, and establish the state as a major Asian centre of excellence in higher education and research. In information technology there is still scope to benefit from the growing worldwide demand for trained software professionals, and catch up with leading south Indian states. Knowledge-based service industries require relatively little investment in facilities and skills, and yield returns within a short span of time. 

And West Bengal can proactively take the lead in biotechnology, widely acclaimed as the next great frontier in science and technology. In particular, it could target development of new pharmaceuticals (especially those pertinent to tropical diseases), pest-resistant and nutrient-enriched food crops. This will require a strategy of strengthening existing institutions of higher education, and creating new scientific and technological centres. Since such investments would be extremely expensive for the government to undertake alone, they will necessitate innovative schemes for cooperation between the government and private industry, both with regard to financing and technical collaboration. 

Historically, West Bengal had a great advantage over all other states in higher education, research and development, but we have lost this edge in recent times. The new government must pledge not only to stop the erosion, but turn the state into a centre of research and development excellence. As an initial step, and one that involves the private sector, the state government should set aside a fixed share of the budget — two per cent is not an unrealistic aim — and announce schemes for matching the effort of the private sector in R&D. 

Second, infrastructure is the base in the absence of which no new investment would be attracted. There are four principal areas where improvements in quality and quantity are urgently needed. Improvement in telecommunications is essential for the growth of IT, knowledge-based service industries, and for the connectivity of businesses and research institutions. 

Then, there is immense need for better roads to link the cities and towns of the state. There is also the question of the availability of sufficient and reliable sour- ces of power. Of course, power does not appear to be a significant constraint currently, but we do not want the shortages to re- appear once an industrial revival is under way. And last of all, port facilities have to be world-class. As with higher education, infrastructure is also an area where collaboration between the government and the private-sector will be essential. 

Third, good health for citizens is increasingly recognized as just as essential as investments in physical capital for economic progress. It is also an important component of any poverty alleviation programme. In particular, the government must work to improve people’s access to safe drinking water, basic health facilities and encourage research in public health and medicine. Improvements in primary schooling and health can be achieved by a partnership between the state government, the panchayats and non-governmental organizations. Gram panchayats and NGOs can be entrusted with the responsibility of operating schools and clinics, and initiating plans for construction of new ones where none exists; the state government can be primarily responsible for construction and overhead support of schools and clinics. 

In addition, the state government should provide help to market and export agricultural and rural products, which create jobs and income for the poor. Even sectors such as IT-assisted goods and services, and processed plastic have the potential for large growth in job-creation and poverty alleviation. 

All the above pledges will involve monetary as well as concrete policy commitments. Our final two pleas are for matters more nebulous and therefore harder to fulfil, but equally important. There is the need for a better work culture, which entails creating and supporting schemes of rewards and punishment. These include the act of dismissal in extreme cases, in the workplace, and avoidance of political interventions in private management-worker relations motivated by short-term political expediency. It has often been pointed out that in India, wages may be low but labour is not cheap. This is especially true of West Bengal. A good work culture is important to no one as much as the workers themselves, for they themselves will benefit from the increased jobs and higher wages that an industrial revival will bring. We believe that labour in West Bengal should be cheap by virtue of being skilled and efficient, not because wages are low. Creating a climate for good labour relations, monitored by legal and quasi-legal institutions, would be essential to ensure this. 

Finally, there must be concrete steps to curb corruption in everyday life. A corrupt system discourages the entry of new firms into business. One of the first principles of economics tells us how efficiency and progress are intimately connected to the ease with which new businesses can be set up. Business success should depend on skill, talent and hard work, not on the ability to exploit personal connections or grease the system. 

Corruption and pilferage also result in bloated government budgets and poorer quality of infrastructure and public services. Most governments know where corruption is rife and who the corrupt are. Byzantine regulations, lack of transparency in the relations of the government to private citizens, and excessive discretion awarded to government officials without concomitant responsibility, all contribute greatly to the culture of corruption. Many Latin American countries have undertaken reforms in the past decade to make administrative changes within the government, with considerable success in reducing corruption. These include separation of powers, heightened monitoring of officials, punishments for corrupt officials, and rewards for honest ones. 

Moreover, the politicization of administration and institutions stokes corruption: committing to maintaining an arm’s length and delegating powers to legal and regulatory bodies is essential. This is important not just for reducing corruption but also for law and order in general. In the workplace, in hospitals, in schools, no one should have the right to take the law into one’s own hands.

Though much has been achieved in the area of agricultural growth, limited land reform, and decentralization through the panchayat system, West Bengal has steadily lost ground over several decades in various areas, especially in the industrial sector. It is time to be ambitious about what can be achieved and to remember that good economic policy may require us to do things which may not always be pleasant in the short run. 

Short term electoral politics encourages competing parties to make promises that are unsustainable in the long run and ignore the laws of ordinary arithmetic. Good policy is not a matter of emotion and table-thumping political speeches, but of painstaking planning, plenty of research and a commitment that goes beyond the next round of elections. 
 


 
 
THE TELEGRAPH DIARY 
 
 
 

 Family honours

A favourable post-lunch session for AB Vajpayee by all indications, never mind the recent outburst of Dattopant Thengadi, the Bharatiya Mazdoor Sangh chief, against him. This is not because our man in the hotseat is growing a thick skin. It is because, Thengadis notwithstanding, the sangh citadel seems to have called a truce with their most politically important sevak. The change, many feel, was not so much prompted by the Congress’s creeping return in many states, as by the bad boy’s making up with the good boy over lunch. Even if the difference between the boys were less stark, there is no doubt that the RSS sees LK Advani with kinder eyes that it does Vajpayee, who is apparently considered “a necessary evil”. So when PM took the initiative to mend fences at Pandara Park, none could be happier than the RSS bigwigs. More so because the détente seemingly ironed out some of the most nagging problems. The issue of the distribution of official patronage among the parivar for one and Vajpayee’s famed niggardliness with it. A hearty meal seems to have cured a bad habit. Three alleged BJP loyalists last week found employment as governors as a result. Kedar Nath Sahni, of the same vintage as our boys, will be governor of Sikkim, NN Jha, retired diplomat, is lieutenant governor of Andaman and Nicobar, and Amolak Rattan Kohli will be the third lucky one. But will that be enough to feed the family?

Secret of her success

Didi, by her own admission, is already past the post. But mediapersons, who didn’t quite understand on what basis Mamata had asserted that the Trinamool was replacing the left, made a beeline for her residence. Before they could ask her questions, didi rushed to her mother’s room chased by photographers who wanted to capture didi in the post-poll mood. There she explained the reason for her optimism. “I am certainly going to win this time as I have got my mother’s blessings”, she said, holding on to the knees of her mother. Haven’t we heard that before? 

Not that bad after all

And the battle between the haves and the have-nots goes on. Newborn Chhattisgarh has surplus power while Digvijay Singh’s Madhya Pradesh has very little of it. Chhattisgarh’s CM, Ajit Jogi, means business and is prepared to give power to big brother MP at concessional rates. But Diggy raja has a problem. His government does not have enough money to buy any power. Had he the kitty, he would have bought power from NTPC at a paltry Rs 1.90 per unit instead of little brother Chhattisgarh. Jogi meanwhile is selling power to Andhra Pradesh and Delhi on commercial rates. That is probably one way for Jogi to show off his business acumen, which has been seriously questioned of late following the Balco mess. Jogi in fact has been trying desperately to change his image which has been perceived to be investor-unfriendly following the muddying of his hands. The CM claims that he has investors from the US, the UK, Japan and Italy knocking at his door with Rs 20,000 crore investment proposals in power and mining projects. A major television network is also reportedly trying to set up an IT institute in Jogi’s backyard. He is at present holding the signing of an MoU with a steel giant with much pomp and ceremony in the hope of wiping off his stigma. Wish him luck. 

Go round less merrily

Circle of friends? The men and women around the Congress president are raising a lot of eyebrows. Both Ambika Soni and Kamal Nath, the main members of Sonia’s new coterie, belong formerly to Sanjay Gandhi’s gang. While Soni is regarded more as a socialite who vibes well with 10, Janpath, the rise of Kamal Nath is sending down shivers in many old spines. However, there is already tension in the coterie. Soni, who has the odd knack of butting into other people’s affairs, seems to be steering clear of Nath’s turf. When asked on West Bengal, Assam or Delhi, her response usually is, “Please ask Kamal Nath about it. He does not like anyone talking about that state.” Keeping safe distance? 

What it actually costs

Each five rupee coin imported by the RBI costs the taxpayer Rs 1.62 in foreign exchange. Each two rupee coin Rs 1.30 because Indian mints can churn out only half the 8 billion coins the country needs. That’s an expensive choice.

Footnote / In need of a helping hand

It’s FMD alright (foot in mouth in this case). And the victim is the AICC spokesperson, S Jaipal Reddy. The United-Front-man-turned-Congresswallah began showing the symptoms after his rather smug statement that Congress regimes have never sought the help of the likes of the Hindujas either for diplomatic or commercial dealings. The informed and the unfriendly almost immediately fell on him citing instances of Rajiv Gandhi’s doing excellent business with Margaret Thatcher and other such disconcerting histories. Worse, Reddy’s remark came when the Hindujas had reportedly called on Sonia Gandhi. But it isn’t the FMD alone that is worrying the Congress. The proposed visit of the PM to Malaysia has made breathing difficult in 24, Akbar Road. Vajpayee is apparently slated to sign the extradition treaty with the Mahathir regime and with Ottavio Quattrocchi in the Malaysian capital the news couldn’t be too sweet for the party. What if Q sings? Arjun Singh and Co has a solution. Bring Vajpayee down before he makes it to Malaysia. Is that why madam seems so oddly impatient with the NDA lately? 

 
 
LETTERS TO THE EDITOR 
 
 
 
 

The bold and the careful

Sir — Instead of Sonia Gandhi, it is Maneka Gandhi who is about to sue Katherine Frank, the author of the controversial biography of Indira Gandhi (“Maneka plans action against Indira author”, May 8). The younger daughter-in-law of Indira Gandhi certainly has more reasons to sue Frank than has the present Congress president. Frank claims that Maneka Gandhi circulated the details of Indira Gandhi’s alleged affair with M.O. Mathai, a charge that the Union minister will surely want to oppose. Sonia Gandhi, the dutiful daughter-in-law, does not need to defend her reputation, only that of her mother-in-law.Indira has thrown up more questions than which daughter-in-law was closer to Indira Gandhi.
Yours faithfully,
Sanghamitra Pal, Calcutta

Make it harder

Sir — Being the largest democracy does not automatically sanction the largest number of public holidays. The editorial, “Holiday fever” (April 16), rightly points out that India is a country of a number of religions and faiths. The problem is that over and above the national holidays declared on religious grounds, there are several more to remember the birth and death anniversaries of freedom fighters, national leaders and former heads of state. Even Parliament remains adjourned from time to time either to pay tribute to a dead leader or parliamentarian or for flimsier reasons. 

The current state holidays list is enormous, and severely tells upon the industrial and economic performance of the country. Tamil Nadu, for instance, has fewer holidays than West Bengal. Newspapers in Tamil Nadu and Delhi remain open on Republic Day and Independence Day. 

Given that India is trying to find a place within the globalized world economy, it is imperative that the number of national holidays be cut down to put economic reforms in the fast lane.

Yours faithfully,
N. Bose, Konnagar


Sir — There are a few holidays too many in this country, especially in the month of April, which is probably what prompted Uma Bharti, the Union minister for sports, to try to keep her ministry functional on Good Friday. The Centre should honour the recommendations of the pay commission by abolishing gazetted holidays. 

It should experiment with a seven-day-week system in banks, post offices and other essential departments. Employees may be given weekly holidays by rotation from Monday to Sunday. To compensate for half-days on Saturdays, they may choose a total of, say, 26 from the list of holidays. This will help keep offices open on all the seven days of the week. There may be just two national holidays, on Republic Day and Independence Day, doing away with all religious holidays. 

The only exception may be made in the case of Holi, when even public transport has to be kept off the road for practical reasons. Long vacations in courts should also be abolished. This will help clear pending cases and bring about a parity in the allotment of holidays to people from all walks of life.

Yours faithfully,
S.C. Agrawal, Dariba


Sir — Uma Bharti’s reputation as an uncompromising politician has certainly been damaged following her swift backtracking on the issue of keeping her department working on Good Friday. Was it because she did not want to be involved in yet another Hindu-Christian debate? Or was it because she did not feel too strongly about it in the first place?

Yours faithfully,
S.M. Sudha, Chennai


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