The Raisina Model

Title: The Raisina Model – Indian Democracy at 70

Author: Meghnad Desai

Publisher: Penguin Viking, 2017 (First)

ISBN: 9780670090136

Pages: 193

India’s transition from a colony of Britain to a sovereign republic was a smooth one. The constitutional process that began in 1919 continued through the Government of India Act of 1935 and served as a broad template to its Constitution. India’s independence was marked by large scale communal violence in which a million people died. Naturally, the longevity of the nascent republic was very much in doubt. A bunch of politicians with no worthwhile administrative experience were tasked with the twin Herculean tasks of drafting a Constitution and steering a newly independent nation with a wide diversity of languages, religions and customs. When we look back now after seven decades, the picture is not rosy, but it could have been much worse! India boasts of a vibrant democracy – troubled yet unbroken except for a short spell of Emergency under Indira Gandhi. The Indian democratic model is moulded on the Westminster system and since the visible symbols of Indian democracy stand on the Raisina Hill in New Delhi, this book creates the euphemism of ‘Raisina Model’ to describe the particular brew of democracy flourishing in the country. Meghnad Desai is an economist who left India in 1961 and taught at the London School of Economics, where he holds the position of Professor Emeritus. He was made Lord Desai of St Clement Danes in 1991 and awarded the Padma Bhushan in 2008. He has authored over 20 books and 200 articles.

On the lines of Churchill who declared that India was nothing more than a geographical term like the equator, Desai argues that India as an old civilization is a cultural idea, or a religious community, but it was not a territorial idea and definitely not a nation state till the time of independence. This begs the question that if not for a political entity, what did bind the country together. It was the Hindu society with its iron frame of the varna system, with Brahmin domination, which kept India together. In the absence of a single political authority, a decentralized system of social control was supervised by the Brahmins. India’s caste system was notorious for its graded inequality. The subtle differences of rank between the castes ensured that except for the people in the lowest rung of the ladder, there were at least a few others below them as far as any other caste was concerned. This false sense of incremental superiority conspired to keep the system intact. It was during the British era that the first hints of a real uplift of the backward communities came about. In this sense, India is having a paradoxical experience of being colonized by a colonizer that at the same time introduced ideas of change and equality. Desai praises the implementation of Mandal Report which conferred reservation in government jobs and educational institutions for the depressed classes as a groundbreaking event in the race for social justice. Anyway, he cautions that even with Mandal, the higher castes may remain ritually high but their economic advantage over the lower castes may shrink.

A very close inspection of Indian democracy is made in the book. In a significant shift from the Westminster model adopted by India, it reshaped the two-party ideal of the British into its own idea of a single dominant party and many smaller parties with regional, but not national presence. Desai mockingly calls this system ‘Snow White and the Seven Dwarfs’ model. When Congress party was on the ascendant, all others were dwarfs. Now, as the BJP usurped that position, the Congress is becoming irrelevant in national politics. Desai identifies the influence of family relations in politics as a bloat to democracy. It is the bane of most parties except the BJP and the Communists, but the most glaring abuse is seen in the Congress which provided the template for others to emulate. Incompetent novices reach the top echelons riding on their father’s or husband’s credentials. The author claims that Mandal deepened the process of Indianizing the Westminster model. This put the Communists on the back foot as they never understood the intricacies of caste. Their role was taken away by the erstwhile socialists when Congress hegemony eventually weakened. Among all the minor differences that separate different parties, Desai observes that all Indian parties are statist, suspicious of free markets, wary of close association with big business, generous with entitlements and not overly concerned with fiscal responsibility (p.91).

Economic wellbeing goes hand in hand with a thriving democracy. Here, India was at a disadvantage right from 1947. The early demise of Sardar Patel who could have acted as a counterweight to fashionable socialism gave a clear hand to Nehru and his cronies. Nehru’s fiscal policy was more of a sign of economic innocence than serious aspiration. His advisors were also equally clueless about the way forward. Nehru planned doubling of national income in ten years. This mandated a 7.2 per cent annual growth rate which was never achieved till Narasimha Rao dismantled the entire edifice of the License-Quota-Permit raj in 1991. The sad part of the debacle was that both Nehru and his daughter Indira who succeeded him had no plans to achieve that elusive growth. While Nehru set the foundations of building up an economy from scratch, Indira set about destroying that structure by adopting ultra-leftist policies such as nationalization of commercial banks and putting in place the machinery of corruption. As a result, national income sadly lagged behind. Between 1600 and 1850, per capita income in India had zero rate of growth. For the next hundred years it grew at 0.5 to 1 per cent per annum. Doubling of income was planned in the second Five Year Plan which was prepared by the statistician P C Mahalanobis. He copied the five- year plan framework of USSR instituted in 1928 which itself was inspired by Karl Marx’s treatises. The focus of the plan was on manufacturing capital goods which was a necessity of USSR in 1928 as it was the target of international sanctions at that time and so wanted to build all the machinery domestically. That was not at all the case with India which could have easily imported them in the 1950s. Such a skewed funding denied investment in the wage goods sector and employment opportunities dwindled.

Having established democracy as the single most important factor that stemmed the trend of disintegration of post-independent India, the author analyses its future prospects. India’s road to salvation and ensuring a decent life to its inhabitants hinges on continuing to maintain the high economic growth rate achieved since 1991. The lack of a national narrative of independent India is lamented in the book. Having published this book in 2017, Desai takes a critical look at the Demonetisation program initiated in 2016 as part of the government’s crusade against black money. This issue was highly politicized which it should not have been. Desai terms the move as a ‘bold and timely one’. It didn’t destroy the currency as alleged by custodians of vested interests, but simply asked the people to convert the currency into bank deposits. The only problem was the delay in getting enough supplies of the new currency on time. It showed the inadequacy of the bureaucracy rather than the failure of the government. Taken as a whole, this book is a fitting tribute to Indian democracy celebrating its seven decades of glorious existence.

The book is highly recommended.

Rating: 4 Star

Timekeepers

Title: Timekeepers – How the World Became Obsessed with Time

Author: Simon Garfield

Publisher: CanonGate Books, 2016 (First)

ISBN: 9781782113195

Pages: 349

As soon as man freed himself from the vagaries of hunting-gathering and settled down for a sedentary life with agriculture, he became slave to time in the form of seasons and months. Accurate reckoning of time was necessitated for sowing and harvesting. The timekeepers were usually priests and astrologers who carved out a prominent place in society on account of the esoteric knowledge at their disposal. With his progress to urban life and technology, time continued to exert its mastery over man, but in lower chunks than before – in days, hours and even minutes! Clearly, the pace of life has speeded up over the ages in response to what is required from each person. Even though the standard of living has undoubtedly improved with each new wave of advance in technology and healthcare, it is questionable whether its quality has shown any upward trend. Forced to lead a mechanical life in sync with the tick of a clock takes away the vitality and intimacy of our everyday lives. This book examines the concept of time on human societies and analyses how people write the modern story of time in their own way. Simon Garfield is the author of several books and writes in newspapers and journals. He was named ‘Mind’ journalist of the year in 2005.

It is no wonder that time is the most commonly used noun in the English language considering its paramount importance to society. What is curious is the attempt at reform in time reckoning after the French Revolution. The French were obsessed with the metric system as a unit of measurement and wanted to extend its usefulness in computation to time as well. A new 10-hour clock was devised in the aftermath of the Revolution in which each hour was divided into 100 minutes. Quite unlike the system’s wide acceptance in the case of distance and weight, the 10-hour clock didn’t gain any traction whatsoever and was quietly dropped. Other strange contraptions like two minute-hands were also seen in the US.

The book gives a good description of the influence of railways in standardizing time in a country. Earlier, each city synchronized its local time with sunrise. Consequently, the time in Oxford was 5 minutes 2 seconds behind London time while Bristol lagged behind by 10 minutes. Evidently, such confusion was not acceptable to trains that ran between the cities. The railway companies adopted London time as the standard on which their timetables were set. Initially, this created problems as some of the wayside stations used their own time. Eventually, the ‘time’ of the idea had come and even the army too fell in line. London time was accepted as the standard in the entire country. In 1840, the Great Western Railway was the first to adopt the idea that time along its route should be the same no matter where a passenger alighted or departed. This task was made possible with the advent of electric telegraph the year before, with time signals from Greenwich being sent directly along trackside wires. In 1880, the British parliament passed Statutes (Definition of Time) Act which made it an offense to knowingly display the wrong time.

Any discussion on time wouldn’t be complete without a sampling of the finest watches made in the world. The Swiss watchmaking industry leads all the others for the exquisite appeal and unmatched technical perfection of its products. That explains why the Swiss watches constitute 58 per cent by value of all the watches sold worldwide, even though they come to just 1.7 per cent by number. After two centuries, they face the toughest challenge in the form of Apple Watch which is a smart device. The industry now focusses on the human aspects conferred by their watches, such as the indication of its owner’s income level which can afford that expensive watch, the expression of one’s unique personality and display of his appreciation of the finer things in life. Garfield addresses the interesting issue of why watch advertisements consistently show the time 10:10 on its face. This particular time ensures that the hour and minute hands pointing in opposite directions that makes the face resembling a ‘smile’. It also shows the position of the date without obstruction, doesn’t obscure the manufacturer’s label at the top of the dial and forms a pleasant and balanced appearance. It seems that setting this time by watch advertisers has nothing to do with Abraham Lincoln’s assassination which is the subject of an urban legend that says that Lincoln’s death had occurred around this instant.

Garfield reserves a large part of the narrative to examine interesting features of how time has influenced the visual arts. There are tiring details of 24-hour movies and documentaries that never end. Attempts to decouple people from the rhythm of eating by embracing a slow process are also catalogued. The information on these sections is no doubt useful, but only to a somewhat privileged group of English and American societies. Others would find reading through these chapters a laborious job. There are many interesting topics the author could’ve included. The origin of time zones and the history behind them would’ve been immensely appealing and doing justice to the book’s title. The complexities of timekeeping with atomic clocks should’ve been described as a counterpoise to how our ancestors kept time with their primitive devices. Overall, readers get an impression that the author has not fully utilized all the options available to him.

The book is recommended only to aficionados of how to weave time with art, particularly movies.

Rating: 2 Star

From Silk to Silicon

Title: From Silk to Silicon – The Story of Globalization through Ten Extraordinary Lives

Author: Jeffrey E Garten

Publisher: Tranquebar Press, 2017 (First published 2015)

ISBN: 9789386224576

Pages: 434

As we know, man is a social animal. He lives and works in a society. The size of the society in which one person operates varies widely with its civilizational level. The primitive, forest-dwelling people works on the level of tribes. All activities such as food-gathering, supporting others, finding partners and doing simple trade happen inside the limits set by the tribal elders. More civilized people move about on the level of the village which is nothing but the next higher abstraction than the tribe in the civilizational ladder. We can still go higher to the city, country or even the whole world which is called Globalization. In this new paradigm, the entire world is miniaturized to a small village and reactions to economic activity on one side of the planet are swift and far-reaching even on its antipodes. However, this is not something new brought about by computers, mobile phones and the Internet. It started 60,000 years ago, when about 150,000 people walked out of Africa in search of food and security – the moment when man stepped out of his evolutionary home to colonize the whole planet. In that sense, the story of Globalization is nothing less than the story of human history. This book describes the lives of ten pioneering persons whose mission in life turned out to be for the growth of Globalization. Jeffrey E Garten is Dean Emeritus at the Yale School of Management, where he teaches a variety of courses on global economy. He is the author of five books on the global political economy and numerous articles in newspapers.

Garten puts down a few criteria to select the pioneers of Globalization. First of all, they had to be transformational leaders or the inaugurators of various eras of world history, such as the Age of Empire, the Age of Exploration, the Age of Colonization, the Age of Global Finance, the Age of Global Communications, the Age of Energy and Industrialization, the Age of Global Philanthropy, the Age of Supranationalism, the Age of Free Markets, the Age of High Technology and the Age of a Resurgent China. The author’s preference is for doers rather than thinkers and so Karl Marx and Adam Smith are left out. Also, the contributions shall be positive and hence Hitlers and Osama bin Ladens are eliminated. Accordingly, the lives and work of nine men and a woman is described in detail in these pages, namely, Genghis Khan, Prince Henry the Navigator, Robert Clive, Mayer Amschel Rothschild, Cyrus Field, John D. Rockefeller, Jean Monnet, Margaret Thatcher, Andrew Grove and Deng Xiaoping. Intellectuals may at once go up in arms against some of the names such as Clive, Rothschild, Rockefeller, or Thatcher, who are considered to be the focal points of capitalist advance to a great part of the world and whose careers were essential to the spread of capitalist philosophy itself. This is acknowledged by Garten to presume Globalization as all about physical, commercial and cultural connections while at the same time bringing about dislocation and destruction in the short term. Anybody can see that the forces of Globalization usher in peace, modernization and prosperity in the long term. Besides, they did not have grand strategies in mind, and they did not spend much time envisioning the major transformations for which they’d be responsible. Their achievements were the result of taking one step at a time, dealing with one challenge at a time.

For some reason, the author had left out Alexander the Great from the compilation even though the Macedonian prince struts into history by unifying Europe and Asia under the roof of a composite state and culture. There is no explanation why Alexander is not there, and Garten begins with Genghis Khan instead. Modern society might wonder what a Mongolian warlord in the Middle Ages had done so great to promote Globalization, but the incremental changes wrought by Khan was in fact more fundamental and long-lasting than the policies of Globalization’s modern day watchdogs such as WTO or the IMF. Genghis Khan integrated much of Asia and helped Chinese innovations and technology spread to all habitable parts of the known world. Printing press, gunpowder and the compass are said to be the three key inventions that changed the course of history and all of them were originated in China and disseminated during the Mongol era. Key concepts in political administration such as the principle of state over church and state capitalism also spread. The Khans were pagans worshipping the Eternal Blue Sky and numerous petty gods. Their inherent tolerance on religious affairs paved the way for the idea of secular national states in Renaissance Europe.

A great fillip to Globalization was made when Columbus discovered the New World in 1492. But it was not just a case of an adventurer one day setting sail towards the setting sun in the Atlantic. Almost a century of exploration preceded that journey. Prince Henry of Portugal, often adorned with the epithet ‘Navigator’, directly influenced Columbus’ voyage in a way. He conquered Ceuta on the Moroccan coast in 1415. His aim was to find treasure, converts to Christianity and trade. However, the traders of Ceuta fled from his domineering rule. Henry was thus burdened with the need of exploring the unknown West African coastline to find a maritime trade route to India and Central Asia. With the disintegration of the Mongol empire, overland routes had become inaccessible due to brigands and warring states. The naval explorations commanded by Henry soon discovered previously unknown islands on the Atlantic like Azores, Madeira, and Porto Sauto. Though he was unable to pick up trade with Asia, he stumbled upon another commodity which was once so appealing to medieval economies, but which fills us with disgust now – African slaves. Henry lifted slaves directly from Africa instead of relying on Muslim intermediaries. On 8 August 1444, the first cargo of 235 Africans were delivered to the Portuguese port of Lagos and this date is since identified as the day modern slavery began. Henry’s exploits are inhuman by modern standards, but it set in motion a series of explorations of the unknown lands that later morphed into discovery. In a sense, the same spirit pervades efforts of exploration in outer space now.

The remaining eight refer to comparatively modern leaders in their respective areas of work. The achievements made by Rothschild, Field and Rockefeller open a window to nineteenth century Europe and America. Rothschild’s banking business was so successful in that era, but the author doesn’t mention how its demise came about. Thatcher dismantled socialist props on the British economy which was somewhat replicated by Deng Xiaoping in China a few years later. Each of the chapters can be read with great interest and readers get absorbed into the easy flow of the narrative. Garten contemplates on the space for future leaders in Globalization’s march forward. He presciently remarks that Globalization is likely to be in for some bad time, judging by the deceleration in cross-border trade during the last decade. His hunch – or shall we say, prophecy – came true when Donald Trump became US President. Trump’s tirade against Globalization and the barriers he is erecting on the path of free trade is jeopardizing the spirit of internationalism. Anyway, the author finds fault with the trade policies of China too, who exploit what is best for them in full while trying to offload the debilitating ones to the Western world.

This book is eminently readable and highly recommended.

Rating: 3 Star

The Golden Tap

Title: The Golden Tap – The Inside Story of Hyper-Funded Indian Startups

Author: Kashyap Deorah

Publisher: Roli Books, 2016 (First published 2015)

ISBN: 9789351941668

Pages: 248

India’s contribution to global trade consisted of spices, textiles and jewelry for a long, long time. Even when the West picked up momentum through Enlightenment and industrial revolution, India continued with the same product mix. We could add software and IT services to the basket in the early 1990s. This newly added item rapidly earned the country rich dividends in the newly globalized economy. As the world shrank further with the growth of enabling technology, capital flowed into India. The glittering success of many startup companies in the IT sector, most of them owned by young entrepreneurs from IITs, caught the imagination of a nation that was used to seeing a person acquiring enough wealth to live peacefully only at the end of a long career of back-breaking work. Fresh college graduates becoming multimillionaires in just a matter of a few years was something the nation watched in wonder. With the dot-com bust in 2000, it seemed that the edifice might come crashing down, but the agility and adaptability of the Indian businessman patiently tapped availability of capital from overseas. Indian startups found the international investors to be a golden tap through which the elixir of Indian startups flowed in. This book tells the inside story of hyper-funded Indian startups. There are only a very few books written about the Indian startup ecosystem and this one is especially noteworthy as it provides the perspective of an insider. Kashyap Deorah is an entrepreneur and investor who started his first company while studying in IIT, Bombay. After it was acquired by a Silicon Valley company, he started Chaupaati Bazaar, a phone commerce marketplace, and then merged it with India’s leading retailer Future Group. In 2012, he co-founded mobile payments company Chalo and sold it to another American company. Evidently, he is the ideal person to give us a feel of the industry.

The growth of Indian IT services industry can be split into three periods – the Internet wave (1994-2002), the Globalization wave (2003-2009) and the Smartphone wave (2010-present). There is a pattern to how the industry gets going. After a young entrepreneur starts, he issues a part of the shares to some angel investors. With the money thus obtained, the company grows and attracts the attention of venture capitalists (VC). More funds flow into the system and the company grows still further. It is then either acquired by a high-caliber US company or it goes for an IPO in the US, getting more money. How can this Win-Win system continue for so long? What makes VCs invest in startups even though most of them are loss-making? Deorah provides a clear answer to this riddle of venture capital philosophy. Only a few investments gave phenomenal returns, and most gave no returns at all. Suppose a VC firm splits its capital of 100 million into 20 investments with 5 million apiece. Out of this, the VC could get away with their money even if only a single investment could fetch the entire 100 million. If two firms returned the fund, it would be a hit and more than that would be a blockbuster. VCs saw the American scenario in which specific startups made a splash and thought that the same strategy may play out in other countries after some years. Just as the US was the time machine for VCs to predict India’s future during the Globalization wave, China became the time machine for global funds to predict India’s future during the Smartphone wave. Unicorns, as the companies with a net worth of $1 billion was called, proliferated in India, but no technology venture that was funded during the mini gold rush between 2005 and 2008 had gone public till now, because in India, you need to be a profit-making company to do so. Deorah states that none of them had been as much as acquired by a public company for any meaningful amount.

The author dwells on the specific features e-commerce has acquired in India and how the bureaucracy is strangling it with hefty regulations. Cash-on-Delivery is the preferred mode of payment in a county where the economy is still powered by over-the-counter cash payments. But the government is still throttling the financing channels of e-commerce companies by denying FDI to them. The administration remains silent while e-commerce companies restructure their entities to somehow get past the regulations using loopholes. Every time the company raised a round of funding, financial sleuths descend upon them with threats of a probe and subsequent prosecution. However, FDI was allowed in this sector in 2015 after a long wait. Deorah wants only minimal assistance from the government like ease of doing business, clarity in regulations, a favourable IPO environment and swift law enforcement to protect from fraud and piracy. These factors make India unique. India will not be the next USA or the next China. It will only be the next India.

The brightest students in India join IITs and there is no contention to the argument that they are the premier educational institutions of India. However, they enjoy an unfair clout among financiers which is guaranteed by the presence of many of their alumni in the topmost VC funds operating in the country. Deorah mentions the academic background of an entrepreneur only if he had studied in an IIT. Most of the companies these IIT-ians founded have fallen by the wayside, but they continue to thrive on the liberal patronage extended by their college mates. Deorah himself remarks that the confidence in IIT entrepreneurs was transforming to hubris en masse. It is seen that the JEE rank of an applicant decides the fate of his request for money from potential investors who have developed the stereotype of a North Indian Marwari boy with single or double-digit JEE rank as the ideal entrepreneur. Obviously, they end up with a lot of money, but the author cautions that excess funding kills accountability, customer focus, the necessity to innovate, organizational discipline and everything else that is needed to make a profitable, long-lasting company. The author himself is not immune from unnecessary boasting like his claim to have foreseen the US recession of 2008 a year earlier! But when VCs tightened their purse strings subsequent to it, Deorah fumes at them for the funding denied to his company. The IIT hangover seems to persist even after long years since Deorah left it. In one instance, he makes a statement in his chain of reasoning as something ‘seems to deny the laws of gravity as if they are in outer space’, but immediately butts in with a footnote saying that the author understands that gravity applies in outer space too, but felt differently. The author misses no opportunity to prove his IIT pedigree!

Most of the cases in which the founders found themselves millionaires do not represent a vindication of the business model put forward by them. Almost all of them are loss-making, but the pioneers could get away with it as they could off-load their shares for a huge sum to other investors eager to get into a much fabled startup. The book is not enjoyable for lay readers as many pages appear to be little different than copies of financial journals. As a whole, it looks like reading about five years of financial articles in one go. If you are still left breathing after this experience, you’d find that it has too many characters, names and numbers to be attractive to ordinary readers. This book is not at all suitable for general-purpose reading.

The book is not recommended.

Rating: 2 Star