Latest from The Wall Street Journal

Quoting from this article

Without saying so, the U.S. will have to be an intermediary. With Indians, American officials insist the Mumbai attacks woke Pakistani leaders up to the true threat of extremism -- in particular Nawaz Sharif, the former prime minister who controls the Punjab. India still distrusts him for past ties to Islamists. President Asif Ali Zardari may be politically weak, but the U.S. points out that India won't get a friendlier Pakistani leader.

Further on

Team Obama wants India to draw down along the frontier to give Pakistan's military cover to shift forces westward against the Taliban. Back have come lectures from Indians about Pakistan's superior force strength on the border. India won't take orders from Washington lightly.

"New Delhi and Islamabad could be encouraged to reopen a back channel to discuss Kashmir and "comprehensive peace." None of this will be easy. But the solution to the Obama administration's so-called "AfPak" problem runs through India."

To me this sounded different to what India's publically stated position is ..

So who are the losers!!

A ramdom list and reflection of my thoughts or lack of it

Urban middle class (UMC): This could be longish again as I try to explain my points. As few people have pointed out that Cong has won seats in most of the urban areas and many have equated that urban middle class has supported Cong and it’s a shift. A possible reason of that could be MMS’s image as reformer which connected well with middle class when he was an FM in PVR govt. But why do I put say urban Middle class in loser category

I believe Fiscal policies and high deficits affect UMC more than any other class. This is the group which is most affected by the any changes into the interest rates and liquidity in the markets. With loan weavers and other bloats we have a very high fiscal deficit (something similar to what we had before 1991) which means the govt is the biggest borrower in the market and leaving very less money for ‘aam aadmi’ to borrow. Thus the total value for money is not going to go down anytime soon would have a direct impact on aspirations of UMC.

Well documented price rise. Again with large deficit and high interest rate govt has a limited scope to make a dent here

If this victory in election can be termed as vindication of the policies that govt was following lets say on Reservations, IIT/IIMs are done now. Which one is next target to propagate social justice? Squeezing of jobs for UMC. Although with Arjun Singh not likely to be in ministry again this one would be interesting to see as I believe MMS and other key people were in principle against the caste based reservation in higher institutions

Infrastructure: last five years were anything but frantic activity on infrastructure build up. We the transport minister expected to retain the portfolio we would see the same pace (or lack of it) although some of the places have benefited check the statewise allocation and their status for NHDP III/IV and you will have your answer.

Communists: now this one is a given, I thought more than the nuclear deal (Cong never talked about it in its election campaign) they lost it because they behaved in Nandigarm, Singur which really showed their ugly face. The killings in Nandirgarm and subsequent refusal to do any course correction made them pay heavy. In Kerala I think numerous run-ins with Church could have had its effect. Now communists will have to worry on keeping their existing flock together rather than expanding. A smaller fallout of this would be they would be missed in LS debates and I always feel this bunch of people are more well prepared for discussions that happens on policy matters.

Modi: Brand Modi was on a roll and irrespective of the overall outcome a collective win in Gujarat-Rajasthan-and-Maha might have propelled him to centre stage faster and he would have become the tallest in BJP after LKA. But now it will require some correction in his brand to get on to centre stage. Media would come after him even harder and a not so good showing for BJP outside Guj just ensured that ghosts of 2002 will continue to haunt him. A win in areas where he was in-charge would have dented some of the voices against him but my guess is he will remain to confined to Guj for quite sometime now.

I think Modi would like to get to the centre stage only when the court cases for 2002 reach to a conclusion either way and his opponents are better off keeping 2002 alive in some form or the other or it might become something like 1984 .. say sorry and move on.

Mayawati: a clear dent in her ambition. She has shown the impatience for the PM chair during the Nuke deal debates in LS. But now with Cong making a severe dent in her upper caste (is it not divisive to talk about caste??) vote bank and her explanation of bad showing in elections means Muslims are still not voting for her party. She would now be worried on keeping her existing votes together. By the way I think BSP is the largest party in India even bigger than Cong and BJP purely from the number of seats that they fought in this election. A smaller fallout is she might not remain a gung-ho supporter of breaking up of UP in smaller states (which makes administrative sense and could be good for that region)

Samajwadi Party: Not because their numbers have been reduced but because they will not be able to play any role in Govt formation. It would take some serious effort from Mulayam to keep this party together and alive as they are not in power in UP and not relevant in Centre.

Laloo & Paswan: First Paswan he has a unique record he has won elections with the margins that has got him into the record books and has remained in central ministry despite different parties ruling at the centre. But he has lost his own seat and LJP failed to win anything. It would take lot of perseverance for him to make himself relevant again. Now on Laloo he has done wonders for Railways and I believe a tie up with cong in Bihar (which he refused and now says was a mistake) would not have made any difference in the final seat tally from Bihar but would have saved a ministry for him. Now with effectively five years out from centre and another atleast seven years (I do not see his party making any real progress in next Bihar assembly election as well) of without power even in Bihar would look like end game for Laloo. But he has very often proved everyone wrong so I would not bet on it.

Grameen Vikas: I thought Raghuvansh Prasad Singh was one of the best ministers not only in the govt but could be counted among the best in other ministries as well. He made serious effort in a ministry which was considered very un-glamorous and gave the country its first social security act in the form of NREGS. The act in itself is brilliant although the execution is a bit problematic with lot of corruption creeping in. This act did wonders for Cong but surely Raghuvansh babu is not going to be part of ministry in new govt and I don’t see someone else working with the same vigor in Grameen Vikas has he has worked.


Srilankan Tamils: Now that the election is over no one in India is going to make similar noices for them. They will now have to wait till TN elections before they again start getting sympathetic voices from India.

Mumbai: the vote share that MNS has received would only mean that they are going to get emboldened in their approach. Mumbai is the only looser with MNS going try to maximize its benefits and with Maha elections round the corner the decibel levels are only going to go up.

There are some others as well like Sharad Power .. it could be end of his PM ambitions as well.

So who is the winner!!

They are not in any specific order.

India the country: in this uncertain times of recession and financial meltdown one thing that you can settle is a very stable govt. A govt who is not held ransom to whims and wishs of few MP parties totally disconnected with the national issues. So with a clear mandate we have fixed one big problem now what remains is tackling the recession and financial meltdown. Although some of the local problems like bloated sovereign account is the creation of the same govt which is voted back to power. But I still think its still better to have this govt with clear mandate on its side than any other absurd combination. So India as a country is clear winner.

MMS: I think even he would not have pretensions that his name or charm could be converted into seats but that’s precisely what has happened. People have silently voted for MMS and I believe this time he should be running the country MMS as the economist not MMS as the ‘nominated’ PM.

RG: He is certainly a winner as some of his instincts proved right, like decision to go alone in UP and clearly the wining factor is higher in seats visited by him. It simply means he would taken far more seriously outside of Cong as well and BJP knows that the person who would run Cong in future in a sauvé urbane person who can stick to his decisions and even while talking to the oft repeated issues will appear graceful.

Cong: A clear winner, people projected by Cong came as a urbane and has a aura of sobriety around them although at times Cong did appear as if not knowing what they are talking about or they tried to talk in different languages. But clearly everyone liked the sedateness that MMS showed.

BJP: now on this one many people will not agree with me and might turn a bit longish as I try to explain my point. This setback I see a winning moment for BJP. If you look clearly there is a marked difference between the way BJP runs its state election campaign and the way they have run their last two national elections. State elections they focus on their strong points which runs on developments and the clear stress on ‘Go-Local’ but I felt the last two national elections BJP ran on what its idea of India is not on what India as a reality is.

I really thought as a first timer into govt they did very well on most of the parameters including infra, fiscal, foreign policy between 1998 -2004 but they lost 2004 as they ran the campaign on what their idea of India is (a supremely confident of its own ability and ‘shinning’ India) but the reality was in picking correct alliances at local levels (think of it what if they had continued with DMK as alliance in TN in 2004) and india as country is still taking its tentative steps towards being a confident young nation so 2004 election campaign was a premature idea.

Again they had a chance to replicate their success in state elections which they kept on winning one after another till Sheila halted them in Delhi (I am discounting Rajasthan as it was lost more due to infighting than someone really defeating them) but then again they ran 2009 national election as a very presidential style and probably didn’t focus as much on local issues. They kept on discounting third-front (which was right ) but did not realize that most of the third front losses would be cornered by Cong as BJP is simply not in position to exploit the losses made by third front (check the states were third front had a presence).

They can no longer escape from the addressing tough questions like why (middle-class) icons or public figures have stopped joining them. I believe this election setback for BJP came at the right time as it will allow them to focus more on ground realities, move away from bringing premature ideas and will allow them to shed lot of unwanted baggage and I hope what would come out would still be a right-wing nationalist party but without the religious rhetoric as i believe they still have the most comprehensive vision for India as a nation barring the religious rhetoric.

VG: He won a seat for himself and made a name for himself but it would take sometime for BJP to count the aggregate losses made by those CDs.

Nitish: More than winning Bihar handsomely for me he is a winner as despite the continuous media chant he kept thinking from his head and in the end he came out as a statesman. I believe if Nitish continues with what he is doing and desist from becoming an ally of Cong he would be a serious contender for the top job in future.

Mr Patnaik: He took a risk and was rewarded handsomely. I believe it will prepare him to take some of the hard policy decisions which he needs to take.

[there could some more .. but let me count the loosers in my next post]

My incoherent thinking on recent happenings

1. Australian Tennis team refuses to play in Devis Cup matches in India.
2. According to some papers Taleban has entered in Kashmir.
3. G20 summit many countries including China pledges to pump more money to IMF.
4. Few senior Indian diplomats visiting SriLanka to discuss the LTTE situation.
5. SriLanka refuses Visa to the Swedish Foreign Minister.
   

To me they all appear connected and show our in-ability as a nation to take hard decisions or think big.

Australian team can refuse to play in India citing shifting of IPL to SA. They have a reason that if IPL has been moved out from India it was for some logic. Their cricket team has been refusing to tour Pak for quite sometime. Kudos to South Africa which can hold IPL even though they too are going through their own General Elections. Remember sometime back our Foreign Minister going to Australia. Some of the reports suggested this visit was after Aussies refused to supply India some of the minerals which could be supposedly used for Nukes.

Taleban enters Kashmir and our Army chief says that Pakistan is still providing helping hand to Terrorists. Recollect what was our response to 26/11? A big set of papers and hue cry in front of media that we have stopped all the dialogues with Pak (which we did indeed) till they stop aiding terrorists. So how is that they come again?

All the developed countries are pumping money into IMF & Worldbank type of organizations so that these institutions can put more money for loans to developing world and others. China is not in the list of countries who will receive loan but is in the list of donors who pledged more money to these institutions. So who will receive it, many countries including Pakistan, and who else, India ofcourse the world’s fifth largest economy.

For much of 60s-70s- 80s we were always clubbed with Pakistan with many can hardly distinguish any difference between an Indian and Pakistani (very often the same ‘derogatory’ term will be for both the citizens) in 90s with some real politic and hard nosed economic decisions we started pulling away from the likes of Pakistan and started imagining ourselves in the league of China.

Yet China was always acknowledged as a power and is a permanent member of security council. India briefly flirted with and tried to make a strong case for a permanent membership but it has died down in the changed world after 9/11.

So where are we now. Back to blaming Pakistan and almost like school goers ‘if you do not give me my pencil I will not talk to you’ and when few more enter into Kashmir ‘I will still not talk to you if you take my rubber also’.

Now Srilanka is decisively winning a war which it is fighting for more than 2 decades. To dodge our internal political bickering which has become spicier due to the elections we send some of our top notch diplomats to Srilanka. But what is their brief? Is it to stop the war? Or is it to allow trapped civilians to get to a safer place? Or do they have a solution which could be favourable to the Srilankan Govt?

Does India has any leverage on Srilanka? It was in 80s when we can send our army to support them but since then our neglect has made them drift towards Pakistan and China and today they source most of their arms from these two countries and hardly depend on India for anything. (even the quick-ness with which Srilanka responded in sending their cricket team to Pak after India refused to send Indian team that to after 26/11 shows how govt in Srilanka could be thinking).

When was the last time our PM/President or some very senior govt official visited Srilanka. When was the last time we invited Srilankan President/PM to india and accorded them state guests status? Why would we expect Srilanka to listen to us? Our refusal to identify a very good friend has give a big foothold to China in Indian Ocean. Practically also it is very hard for India to back or even seen to be backing LTTE as most of their funding remain dubious. Also LTTE has never claimed any friendship with us and is directly accused in killing our former PM. A practical decision would have allowed us to back Srilankan war against LTTE and get back some of warmth in the relationship. Also it does not help that on the same 'Ram' who is questioned in India, Srilanka is trying to identify places attached to 'Ram' and develop them as a tourist attraction.

And think of it Srilanka not allowing visa to a very prominent minister. Remember the stream of visitors we had after 26/11 and everyone urged us to remain calm but no one said for how long?

Someone is not telling the whole story!!

RG says, Quoted from India-today Article

Launching a scathing attack on the BJP's prime ministerial candidate L.K. Advani, Gandhi said: "Why did Advani not remember to bring back the alleged black money for even once during the five years of the BJP-led NDA rule and why was he raising this during (the) elections."

This statement is contrary to some of the details that everyone else is talking about. Is it that he has not kept pace with changes or he has not seen the latest reports?

It seems Government of Germany had succeeded in obtaining names of persons who had stashed money in the LGT Bank in Lichtenstein sometime last year which actually started this.

Quoting from a Business world article

To appreciate the implications of this[G20 communiqué], it is important to know the background. Swiss banks are obliged by law to extend a very high degree of bank-client confidentiality to all their clients, both Swiss and foreign. Any banker who reveals details of his clients’ affairs to unauthorized third parties is committing a criminal offense in Switzerland.

But this bank-client confidentiality has never been 100% absolute, and Swiss legislation makes absolutely clear what it protects and what it does not protect. It poses, for example, no obstacle whatsoever to a criminal investigation.

One characteristic of Swiss law is that it distinguishes between tax evasion and tax fraud. Submitting an incomplete tax return, for example, would be tax evasion and is handled through administrative measures, including severe fines if necessary.

So, despite some foreign media reports, tax evasion is not legal in Switzerland; it merely is not a criminal offense. Anyone found to be illegally evading his tax obligations in Switzerland faces severe financial penalties.

The international implication is that Switzerland has traditionally offered international assistance in criminal tax cases that have elements of fraud, but not of evasion. By agreeing to adopt the standard on the exchange of information set out in Article 26 of the OECD’s Model Tax Convention, Switzerland will now extend administrative assistance to cover all tax offenses, including tax evasion.

Also this is a recent change and more so due to recession that rest of the world has started putting pressure on Tax havens for information.

Swiss banking giant UBS agreed last month to pay $780 million and turn over once-secret records to settle a case brought by the U.S. Justice Department. (By Alessandro Della Bella -- Associated Press)

As recent as couple of weeks back G20 Summit has taken up to cause to and have mentioned the tax havens in their communiqué. Even MMS was past of that summit and Cong says that G20 was not the right forum to raise this issue.

In an article in The New Indian Express Arun Shourie has thrown up some more details on this. Click on the link to read this further

Why is our PM not contesting elections!!

First the disclaimer: Just by asking this question does not mean that I am on the ‘right-side’ and hence you can go ahead and give me another big one on how violent they are .. how they make hate speeches and how other side is lesser evil and thus needs to be supported. Sorry I fear the folks putting ‘lesser evil argument’ equally. I am just trying to provide you with twisted arguments & collection of articles with my affinity of asking wrong questions.

PM just had a surgery at the start of the year and have not fully recovered any election will be a big toll on his health

Quoting from the same link.

"I just had a bypass heart surgery and recovery will take some time," he told mediapesons in reply to a question if he felt confident to contest the Lok Sabha elections in the context of his being projected as the Prime Ministerial candidate of the Party.

"I don't think I am in a position right now to jump in the election fray," Dr Singh recalled numerous instances when the Rajya Sabha members had continued as Prime Minister.

"Indira Gandhi started her Prime Ministerial career from the Rajya Sabha and so was Mr H D Deve Gowda and Mr I K Gujral. The Constitution is clear on the issue. So long as it remains unaltered, Mr Advani should not make such remarks," the PM said.

But then PM has gone ahead and started the poll campaign in Kerala and Maharashra

PM was also scheduled to do an election rally in Assam which was cancelled finally due to bad weather.

How here is the thing – the same PM who is not fit enough to contest for his own election is fit enough to travel around the country and take part in election rallies.

Surely he could have opted for a seat in Delhi which could have allowed him to be in Delhi and contest an election as well.

Deve Gowda and Mr I K Gujral did not stay long enough on their posts but I think Indira Gandhi contasted and won elections soon after becoming PM. I think even PVNR was not a member of the house when he become PM but he soon fought the elections to become one.

I am pretty sure there was ‘a logic’ when Indira Gandhi opted to resign from Rajya Sabha and decided to fight elections. But we do not have the same logic applied here.

Rajya Sabha by definition is representatives of states who are not directly elected by Indian public and a Govt can survive even if does not have a majority in Rajya Sabha.

But the same Govt can not survive if it does not have a simple majority in Lok Sabha as that was thought as the representative of ‘common public’.

So going by that logic probably it was appropriate for PM to be a member of Lok Sabha.

Our PM had good chance to fight an election this time. This could also have dis-allowed the opposition to beat him with such ‘trivial things’.

But then still he is not contesting: Could it be fear of not winning his own seat? Cong could have found a safe heaven for him. He could have contested from Amethi which is always known as a very safe seat for Cong even when Satish Sharma was contesting.

But then still he is not contesting:
Now here is my speculation “could it be as we all suspect that this time MMS will not be around for all the five years and could ‘relinquish’ his post for a much younger leader”.

As he has openly stated that ‘the’ young leader has all the qualities to be the PM

Also again from my twisted mind a PM MMS as a member of lok sabha ‘relinquishing’ his post would be harder to explain that a PM MMS as a member of Rajya Sabha.

Also his term in Rajya Sabha would come for renewal in next couple of years which could be a good time to hand over the baton.

As that would fit well with other un-stated views that it would take 2-3 years to have an effective organization in key states of UP & Bihar and then the ‘young leader’s’ work would be visible on ground. Listen to the clamor of voices saying how he would be a good PM and is already ready to be the PM and then back tracking them. I would think this is a well thought plan to keep MMS well within the limits.

Third one: With so many fragmentations into this election and with so many PM candidates there could be an assessment that this might turn out to be a repeat of 1996 elections. So its ideal keep MMS in the loop but from Rajya Sabha only while prepare the ground for the ‘chosen one’. Remember the delays we had in Cong naming its PM candidate. Could it be due to the fact that they were still carrying out some of these assessments and reached to a conclusion that this time its too crowded to pitch for ‘younger lot’ so they decided to continue the status quo. Certainly few of this time’s PM candidates would not be pitching again in next elections whenever that happens.

Edited to add: Just listening to a debate on TV where one of the debaters says that PM decided to be combetive and start responding to comments made against him after he was declared as a PM candidate. What beats me is that why it took so long to declare something which should have been there from the first day itself as he is a sitting PM and his party says that he has performed so well, so why was this delay in stating what i thought was the 'obvious'.

NGO Money!!

My experience of working with NGOs was absolutely great but a recent article by IIM Prof R Vaidyanathan in DNA on the funding of NGO is an interesting read. You can find the original link here.

Some of the details from the article

“We also find that in the last three years, the amount received has shown a phenomenal increase and it was 56% more in 2006-2007 than in the previous year.”

Another interesting fact according to the article ‘relatively’ well of states receive more money than relatively poorer states. Is it due to the better awareness in ‘relatively’ well-off states like

“Tamil Nadu (Rs 2,244 crore), followed by Delhi (Rs 2,187 crore), Andhra Pradesh (Rs 1,211 crore) and Maharashtra (Rs 1,195 crore).”

Further quotes on their nature of spending

“The interesting information is regarding the purpose of the donations (see Table-2). Establishment expenses top the list, followed by relief and rehabilitation, rural development, child welfare and construction and maintenance of schools and colleges."

"Establishment expenses consist of buying land, buildings, jeeps, setting up fancy offices, mobiles, laptops, expensive cameras, salaries, consultancy fees, honorarium, and importantly, foreign travel etc, which make up 35-70% of the expenses. This goes against the grain of service motto where the ultimate recipient is supposed to get the maximum.

By definition, NGO activity is voluntary and hence one expects that the overheads of the organisations are lean. In financial parlance, the fixed cost is expected to be relatively small.”

A case of large sum of money ‘opaquely’ going un-accounted in the name of establishment cost?