France has taken position for long to separate the state and the church (yes, it was church originally). To large extent they were successful to diminish the influence of church on the state but not completely. Many of the Christian symbols continue to be part of public life at large. No one raise question about bearing wedding rings or hanging picture of Jesus in the schools. As the society became more multi-cultural and multi-ethnic then people from different cultures and religion also started to show their religious/custom symbols at public places.
This process became slowly unbearable to the state and France choose to redefine secularism. First, France banned religious symbols in schools and other public institutions. I personally supported this ban because some people were taking too much advantage of religious freedom. For example, girls were not allowed to attained biology classes, particularly reproduction related classes, and they were not allowed to attained compulsory physical training in the school. There were some instances when students asked for a break in the middle of the exam to pray. I felt this was exploitation of freedom.
But now the state is intruding into the personal life of individuals. Last year, French immigration department and the court denied citizenship to the Moroccan woman because she was using hijab or burqa. Though the argument was given by the immigration authorities that she did not integrate with the French society but it is anyone's guess what happened. This case already made too much discomfort in the Muslim society in France but to make situation worse French president Sarkozy has said now that Islamic burqa is not welcomed in France. His argument is that it is not the requirement of the Islam to bear burqa. Though he is right technically because the Quran did not say anything about burqa explicitly. But here is what Quran says in Al-Noor about the dress code for the followers
"And tell the believing women to subdue their eyes, and maintain their chastity. They shall not reveal any parts of their bodies, except that which is necessary. They shall cover their chests, and shall not relax this code in the presence of other than their husbands, their fathers, the fathers of their husbands, their sons, the sons of their husbands, their brothers, the sons of their brothers, the sons of their sisters, other women, the male servants or employees whose sexual drive has been nullified, or the children who have not reached puberty. They shall not strike their feet when they walk in order to shake and reveal certain details of their bodies. All of you shall repent to GOD, O you believers, that you may succeed."
Quran only recommends the believing women to cover their body and chest in particular. There is no mention to cover from head-to-toe in a burqa. Even a jeans and long sleeve t-shirt should be perfectly Islamic according to the Quran's view. But on the contrary if a women wants to bear burqa to cover her body then she should have freedom to do so. She might be bearing burqa because of her culture, tradition or family pressure but it is all personal. State has no right to interfere in personal life. Of course, if a woman rebel against her family pressure to bear burqa then the state should provide her protection and social help to lead her life in a way she want to, without burqa.
The more pressure state will put on individuals, the more it will be helpful for the extremist to spread fundamentalist ideology. Choice is of the people in a democracy to choose what they want but the minorities need to be taken care of even if they do not have enough votes.
Monday, June 22, 2009
Sunday, June 21, 2009
Kolkata's missing millionaires and Lalgarh: rumour-style article
This (Kolkata's missing millionaires Lalgarh) is one of the most highly rated and commented blog from Anand Soondas. It is difficult to understand what was his intention before writing this blog and how a national news paper can allow him to continue to write blog?
First of all, why he has linked number of millionaires with the Lalgarh? There is no apparent relation between the two. Then, he has used some statistics from some source about the number of millionaires in different metros. Though it is difficult to find true number of of millionaires in Indian cities because very few people pay proper tax but lets accept these numbers are true for the sake of argument. If the author wants to assess the prosperity in the state by counting the number of millionaires then it serves no purpose. There can be a state or country that has equal distribution of income and no one is very rich. Does that mean that state is very poor? In the comments, some of the readers have named Cuba as poor state because of the communist rule in that country. These people need to refer to the UN Human development report for Cuba. People might not be earning much but they have best medical facilities in the world. Life expectancy as good as in America. Per capita income might be low in Cuba but HDI is much better than India. So drawing any analogy that a communist state will be poor and low development has no basis.
Per capita income does not reveal any thing about the distribution of the wealth of the state. If the author has done any course in statistics then he must know there is something called the mean and the variation. Having a high mean and huge variation will only create some very rich individuals and a lot of people living in the slums like Dharvi.
This author and some of his comments have talked that communist do not want people to be educated and particularly educated in English. Isn't it sound funny argument. Who said that a multinational company need English educated graduates before investing in a state? We, on average, speak much more English than our counterparts in China. When so many, almost all multinationals in the world, companies can setup their operation in China then why not in India or Bengal? At least language can not be a barrier. (As a country Cuba has second highest literacy rate in the world). It seems while writing this blog the author is having IT workers in his mind. He is thinking of those white coloured workers doing backoffice jobs. That provides good foreign exchange and high paying jobs to some workers but not job to many workers that is something we need to avoid many more situation like Lalgarh.
After reading such superficial piece in a leading news papers people get excited to comments and this brings out how ignorant educated people India has. One comments says that it can happen only in Bengal that people voted for Mamata Benerjee who does not have proper clothes. This gentleman wants nice looking politician. Hmm.. Do we need some very corrupt politicians who have lots of money in the Swiss banks? Perhaps not.
After going through the comments, and so many, it seems that people like this kind of blogs. But it is is the responsibility of the journalists to avoid getting into the popularity traps all the time and talk some sense that might not be good for the educated people's taste but truth, facts and balanced views need to be circulated rather than rumours.
First of all, why he has linked number of millionaires with the Lalgarh? There is no apparent relation between the two. Then, he has used some statistics from some source about the number of millionaires in different metros. Though it is difficult to find true number of of millionaires in Indian cities because very few people pay proper tax but lets accept these numbers are true for the sake of argument. If the author wants to assess the prosperity in the state by counting the number of millionaires then it serves no purpose. There can be a state or country that has equal distribution of income and no one is very rich. Does that mean that state is very poor? In the comments, some of the readers have named Cuba as poor state because of the communist rule in that country. These people need to refer to the UN Human development report for Cuba. People might not be earning much but they have best medical facilities in the world. Life expectancy as good as in America. Per capita income might be low in Cuba but HDI is much better than India. So drawing any analogy that a communist state will be poor and low development has no basis.
Per capita income does not reveal any thing about the distribution of the wealth of the state. If the author has done any course in statistics then he must know there is something called the mean and the variation. Having a high mean and huge variation will only create some very rich individuals and a lot of people living in the slums like Dharvi.
This author and some of his comments have talked that communist do not want people to be educated and particularly educated in English. Isn't it sound funny argument. Who said that a multinational company need English educated graduates before investing in a state? We, on average, speak much more English than our counterparts in China. When so many, almost all multinationals in the world, companies can setup their operation in China then why not in India or Bengal? At least language can not be a barrier. (As a country Cuba has second highest literacy rate in the world). It seems while writing this blog the author is having IT workers in his mind. He is thinking of those white coloured workers doing backoffice jobs. That provides good foreign exchange and high paying jobs to some workers but not job to many workers that is something we need to avoid many more situation like Lalgarh.
After reading such superficial piece in a leading news papers people get excited to comments and this brings out how ignorant educated people India has. One comments says that it can happen only in Bengal that people voted for Mamata Benerjee who does not have proper clothes. This gentleman wants nice looking politician. Hmm.. Do we need some very corrupt politicians who have lots of money in the Swiss banks? Perhaps not.
After going through the comments, and so many, it seems that people like this kind of blogs. But it is is the responsibility of the journalists to avoid getting into the popularity traps all the time and talk some sense that might not be good for the educated people's taste but truth, facts and balanced views need to be circulated rather than rumours.
Wednesday, June 17, 2009
Lalgarh: A shame for the red-flag holder Communist parties in India
It is a shocking news that the Maoists have hold up town just 200 Km from the capital, Kolkata. Though the distance does not matter because every city and town and village should be equally shameful for the state and the central government. Central government will not co-operate too much at this time because of their strained relationship with the communist parties and friendship with Mamta Benerjee.
We had heard this kind of new from Sri Lanka where LTTE controlled one-third of the country's land and Pakistan where Taliban was successful in getting Sharia law in Swat valley. But this is shocking to hear that this is happening in our backyard as well. Police is helpless without automated weapons to face the challenge of Maoists.
It is irony that the communist parties those were supposed to the take the cause of the poor has failed to serve them in last 30 years. Rather than developing economic equality and social welfare programs, the ruling party developed anarchy and exploited the poor. Situation is so bad that the tribes are supporting the Maoists in Lalgarh and they were dancing and celebrating the liberation from the police, administration the CPM cadres.
Taking arms can not be supported in a democracy but these people have open and firm support from the local people shows that the local people have grievances that have not been heard of or addressed. Eventually a large number of these armed Maoist cadre will be killed in reserved forces operation in next few days but this does not solve the real problem - exploitation of poor. Success of armed forces in Lalgarh is no guarantee that other cities or town will be captured by Maoist in future. unless a comprehensive overhaul of the public policies is undertook in the region.
We had heard this kind of new from Sri Lanka where LTTE controlled one-third of the country's land and Pakistan where Taliban was successful in getting Sharia law in Swat valley. But this is shocking to hear that this is happening in our backyard as well. Police is helpless without automated weapons to face the challenge of Maoists.
It is irony that the communist parties those were supposed to the take the cause of the poor has failed to serve them in last 30 years. Rather than developing economic equality and social welfare programs, the ruling party developed anarchy and exploited the poor. Situation is so bad that the tribes are supporting the Maoists in Lalgarh and they were dancing and celebrating the liberation from the police, administration the CPM cadres.
Taking arms can not be supported in a democracy but these people have open and firm support from the local people shows that the local people have grievances that have not been heard of or addressed. Eventually a large number of these armed Maoist cadre will be killed in reserved forces operation in next few days but this does not solve the real problem - exploitation of poor. Success of armed forces in Lalgarh is no guarantee that other cities or town will be captured by Maoist in future. unless a comprehensive overhaul of the public policies is undertook in the region.
Tuesday, June 16, 2009
A critic to Woman Reservation bill
Woman reservation bill is pending in Indian parliament for over a decade and it has come for discussion many times but there has not been any concession on the form of the bill. No doubt it is an initiative with good intention but execution is flawed from conception.
This bill gives 33% reservation in the lower house in parliament and state assemblies for next 15 years.
Argument: Woman represent almost 50% of the population of the India but they represent less than 10% in the parliament so they need this kind of support.
Critic: How exactly this bill make 50% representation possible in next 15 years? How they (supporters of the bill) come up with 33% reservation and not 10% or 50%? One assumption can be that they are taking 50% probability for each woman MP to win next election without reservation. So after 3 general election there will be almost 50% women in the parliament. If it was so easy to win election then the many women (and men as well) would have jump into politics and become MPs. In reality chances are that these MPs will be defeated by the powerful, influential and of course good politicians. So the dream of having 50% women MPs will not be fulfilled and it will remain a dream only.
Argument: Women are socially weaker section and they will get this support to come out and represent the society.
Critic: Our current electoral system does not stop any women to contest election. They do not come out and contest because they have less motivation to do so. Many of them other priorities (e.g. family commitments). Election will still require money, power and influence to win the elections. Our electoral system is still party system. So only the influential women will only be able to get party tickets. If the party will not give pickets to anyone really socially weak woman, how on earth this will help in uplift of the weaker section of the society? A large number of these tickets will go to the wives, daughters and mothers of the sitting MPs and their strongest opponents because the bill not let them contest themselves so they will use family members as proxy to remain in power.
This will also demotivate the sitting MPs to work for their constituencies as there is no incentive to do anything when they can not contest election next time. In such a scenario what the use of MPLADS (MPs local area development scheme)?
Many think tanks have suggested that rather than reserving the constituencies, the bill should make this mandatory for all the recognised parties to give tickets to 33% tickets in each state. This will give freedom to the parties to field some strong sitting candidates in some constituencies and also give opportunity to the women to come forward into the politics.
I will say that best way to merge these two different approaches. Rather than 33% constituencies, reserve just 10%. It will make sure that there are minimum number of women MPs. Secondly, made this mandatory for the recognised parties to field at least 33% women candidates.
Though there are other issue to discuss as well in the bill. For example, why this bill does not talk about upper house in the parliament and the legislative councils in the states. But these can be sort out with less pain, if the basic consensus on the format of the reservation is made.
This bill gives 33% reservation in the lower house in parliament and state assemblies for next 15 years.
Argument: Woman represent almost 50% of the population of the India but they represent less than 10% in the parliament so they need this kind of support.
Critic: How exactly this bill make 50% representation possible in next 15 years? How they (supporters of the bill) come up with 33% reservation and not 10% or 50%? One assumption can be that they are taking 50% probability for each woman MP to win next election without reservation. So after 3 general election there will be almost 50% women in the parliament. If it was so easy to win election then the many women (and men as well) would have jump into politics and become MPs. In reality chances are that these MPs will be defeated by the powerful, influential and of course good politicians. So the dream of having 50% women MPs will not be fulfilled and it will remain a dream only.
Argument: Women are socially weaker section and they will get this support to come out and represent the society.
Critic: Our current electoral system does not stop any women to contest election. They do not come out and contest because they have less motivation to do so. Many of them other priorities (e.g. family commitments). Election will still require money, power and influence to win the elections. Our electoral system is still party system. So only the influential women will only be able to get party tickets. If the party will not give pickets to anyone really socially weak woman, how on earth this will help in uplift of the weaker section of the society? A large number of these tickets will go to the wives, daughters and mothers of the sitting MPs and their strongest opponents because the bill not let them contest themselves so they will use family members as proxy to remain in power.
This will also demotivate the sitting MPs to work for their constituencies as there is no incentive to do anything when they can not contest election next time. In such a scenario what the use of MPLADS (MPs local area development scheme)?
Many think tanks have suggested that rather than reserving the constituencies, the bill should make this mandatory for all the recognised parties to give tickets to 33% tickets in each state. This will give freedom to the parties to field some strong sitting candidates in some constituencies and also give opportunity to the women to come forward into the politics.
I will say that best way to merge these two different approaches. Rather than 33% constituencies, reserve just 10%. It will make sure that there are minimum number of women MPs. Secondly, made this mandatory for the recognised parties to field at least 33% women candidates.
Though there are other issue to discuss as well in the bill. For example, why this bill does not talk about upper house in the parliament and the legislative councils in the states. But these can be sort out with less pain, if the basic consensus on the format of the reservation is made.
Prime Minister Manmohan Singh meets Pakistan's President Zardari in Russia
Indian PM Manmohan Singh is expected to break the ice with Pakistan in Russia. It is a significant move considering India's stand for last six months of no-talk with Pakistan until terror suspects are prosecuted.
Though a large number of India might have get emotional after the 26/11 attack on Mumbai and they resist any talk with Pakistan but the reality is we can not have peace in the region without talking to our neighbours. Pakistan army, that was ruling the country for almost 40 years, might have supported the terrorist organisations in the past to create disturbances in India but now Pakistan is facing serious challenges within its boundaries from the same terrorist groups. In the last decade situation has changed a lot for Pakistan. Pakistan need to concentrate on its western borders to keep its sovereignty rather than attacking its eastern neighbour, India.
Pakistan is suffering from terrorism and fundamentalism. Isolating and blaming Pakistan for every bomb blast in India will only create the worse situation. This attitude also increase American influence in the region because when we do not talk to Pakistan directly then we talk through America. For every dialogue we have to run to Washington or call the south Asian envoy of America. Isolation also gives opportunity to China to strengthen its ties with India's neighbour.
The time has come when we need to be less hostile towards Pakistan and co-operate with it to share the intelligence and develop strategy to counter fundamentalism in the region. India should go forward and support Pakistan financially and economically through free trade of selected items (e.g. Sugar, cement etc.). A sense of confidence in India and economic dependence on India can only make Pakistan friendly toward India.
Lets see what this meeting in Russia can bring for the two neighbours.
Though a large number of India might have get emotional after the 26/11 attack on Mumbai and they resist any talk with Pakistan but the reality is we can not have peace in the region without talking to our neighbours. Pakistan army, that was ruling the country for almost 40 years, might have supported the terrorist organisations in the past to create disturbances in India but now Pakistan is facing serious challenges within its boundaries from the same terrorist groups. In the last decade situation has changed a lot for Pakistan. Pakistan need to concentrate on its western borders to keep its sovereignty rather than attacking its eastern neighbour, India.
Pakistan is suffering from terrorism and fundamentalism. Isolating and blaming Pakistan for every bomb blast in India will only create the worse situation. This attitude also increase American influence in the region because when we do not talk to Pakistan directly then we talk through America. For every dialogue we have to run to Washington or call the south Asian envoy of America. Isolation also gives opportunity to China to strengthen its ties with India's neighbour.
The time has come when we need to be less hostile towards Pakistan and co-operate with it to share the intelligence and develop strategy to counter fundamentalism in the region. India should go forward and support Pakistan financially and economically through free trade of selected items (e.g. Sugar, cement etc.). A sense of confidence in India and economic dependence on India can only make Pakistan friendly toward India.
Lets see what this meeting in Russia can bring for the two neighbours.
Monday, June 15, 2009
Moving out of poverty through NREGS seems difficult
Indian congress has won 2009 elections mainly by populist measures they have implemented in last five years. These steps have bring any real good to the poor people remains debatable. When anyone gets a job, that generally does not produce any infrastructure or service, through NREGA (National rural employment guarantee act) it seems good to everyone. But the problem with this kind of scheme are two. First, the huge money spent by the central government does not create any meaningful infrastructure or sustainable employment projects. Second, people who get employment will not be out of their poverty because one need skills and opportunity to come out of poverty rather than giving them life time support that is not sustainable.
Budget allocation for this scheme has been over Rs 50,000 Crore in last two years. It was time of economic boom that helped the government to collect huge tax from the corporation to support this kind of scheme. As the economic boom time is over and many of the Indian public companies are struggling to pay salaries (Air India delays salary by 15 days) and eventually the government will need to come to rescue these companies in the form of bailout. These bailout cannot happen unless the government cuts its spending somewhere. And these cuts will be on the public spending and essential social welfare programs.
Just to illustrate how much could have been done by using the money properly and building something that every poor needs. If the government had used the public land in the villages and town to build 2 bed room houses for the poor home less families then it could have easily build over 50 lakhs houses (a two bedroom unfurnished house does not cost over Rs 1 lakhs when land can come for free from public land of Panchayat and municipalities). This construction work should have given employment to a large number of poor in village though the number might be less than the employment provided by the NREGS. The homeless or people living in mud houses could have been allotted these houses and the government could have charge them a nominal rent per month (lets say Rs 500-1000 per year). This might give income to government in the range of Rs 250-500 Crore per year and this can be reinvested in other social welfare programs.
I have just given one example. But the government can use money for any other program, e.g. public health care or education etc., and directly or indirectly these investment can bring long term benefits for the government and the public at large.
In fact this scheme is flawed in its concept of providing employment for only 100 days. If we know there are poor people who can not find work then how can be expect to guarantee work (or money) only for 100 days out of 365 days in a year? What the people suppose to do rest of the year? Is there any study or empirical analysis that shows that everyone in the country has work for at least 265 days? If not then the poor has to die of hunger or suffer from the hard realities of the poverty and these sort of schemes can only lessen the suffering but not eradicate them.
Biggest challenge for this scheme is to monitor the performance of the scheme. Since all the records are to maintained by the Gram Panchayat, many of them have poor knowledge and motivation to do so. Benefit of the scheme goes to close relatives of the member of the Gram Panchayat and many a time, minimum wages are not paid because the work is on the mercy of the head of the Gram Panchayat. For example, I personally know people who work for the Polio campaign that happens every 6-8 weeks in India. Many of them do not even get Rs 50 per day to work over eight hours and visit door-to-door. Problem is if they refuse to work for this low wages than prescribed by the government of India, another person will come to work. The contractor or middle man never loses, it is the poor who suffers.
Budget allocation for this scheme has been over Rs 50,000 Crore in last two years. It was time of economic boom that helped the government to collect huge tax from the corporation to support this kind of scheme. As the economic boom time is over and many of the Indian public companies are struggling to pay salaries (Air India delays salary by 15 days) and eventually the government will need to come to rescue these companies in the form of bailout. These bailout cannot happen unless the government cuts its spending somewhere. And these cuts will be on the public spending and essential social welfare programs.
Just to illustrate how much could have been done by using the money properly and building something that every poor needs. If the government had used the public land in the villages and town to build 2 bed room houses for the poor home less families then it could have easily build over 50 lakhs houses (a two bedroom unfurnished house does not cost over Rs 1 lakhs when land can come for free from public land of Panchayat and municipalities). This construction work should have given employment to a large number of poor in village though the number might be less than the employment provided by the NREGS. The homeless or people living in mud houses could have been allotted these houses and the government could have charge them a nominal rent per month (lets say Rs 500-1000 per year). This might give income to government in the range of Rs 250-500 Crore per year and this can be reinvested in other social welfare programs.
I have just given one example. But the government can use money for any other program, e.g. public health care or education etc., and directly or indirectly these investment can bring long term benefits for the government and the public at large.
In fact this scheme is flawed in its concept of providing employment for only 100 days. If we know there are poor people who can not find work then how can be expect to guarantee work (or money) only for 100 days out of 365 days in a year? What the people suppose to do rest of the year? Is there any study or empirical analysis that shows that everyone in the country has work for at least 265 days? If not then the poor has to die of hunger or suffer from the hard realities of the poverty and these sort of schemes can only lessen the suffering but not eradicate them.
Biggest challenge for this scheme is to monitor the performance of the scheme. Since all the records are to maintained by the Gram Panchayat, many of them have poor knowledge and motivation to do so. Benefit of the scheme goes to close relatives of the member of the Gram Panchayat and many a time, minimum wages are not paid because the work is on the mercy of the head of the Gram Panchayat. For example, I personally know people who work for the Polio campaign that happens every 6-8 weeks in India. Many of them do not even get Rs 50 per day to work over eight hours and visit door-to-door. Problem is if they refuse to work for this low wages than prescribed by the government of India, another person will come to work. The contractor or middle man never loses, it is the poor who suffers.
Friday, June 12, 2009
Foreign universities and degrees in India
Current Humane resource and development (HRD) minister Mr. Kapil Sibbal is enthusiastically talking about deregulating the education sector for the foreign universities. One of the key point is that India does not have enough universities to cater the demand for the higher education and many students have to leave the country to get degrees.
First half of the argument, India does not have enough higher education institute, is true. But student leave India to study abroad for higher education is not completely true. Even if we have more universities in India, run by government of India or foreign universities, students will continue to go abroad for higher education. A large number of the students do not go abroad because they do not get admission in a good university in India but there are two other reasons. First, many of the students go abroad in search of settlement in a developed country. Second, they go to gain international exposure and come back. Whatever the situation of education in India. These two groups will continue to go abroad. Probably these two groups do not care too much about the degree as such as other objectives of studying in a foreign university.
We already have many universities in India. Problem with a large number of them is that they have no quality education. So, if we are inviting the foreign universities to create the environment of competition then it is unlikely to happen. The universities who will first setup 'shops' (or the campuses) in India will be the 'B' or 'C' grade universities from abroad who needs money to fund their operation in their home countries. It is very unlikely that MIT, Stanford, LSE. Oxford, Yale or Stephen Hokinks Medical Center will come to setup campuses in India.
So the students who go to foreign universities will still go and the quality of education will still not improve. What's the point of opening the education sector to foreign universities? Many of the students will get into the advertising trap of getting degree from foreign university and will pay huge tuition fees. These students and their parents will be one to suffer the most. As we have seen in case of ISB, Indian School of Business. It is not run by foreign universities but the tuition fee is almost as high as in any business school around the world for one year course. It is still successful because it is created by the business groups to have some management trainees and later manager. But every school can not be so successful.
Other problem is that these universities will charge higher tuition fee that most of the middle and lower class (most of the population of India lie in that category) will not be able to afford it. Government though the nationalised bank can provide soft education loans to students. But mind you, loan is a liability for the students and not the university. Students will get degree from foreign university with little value and they will carry huge financial liability. In case of ISB, students can take education loan upto 20 lakhs from banks. We need to realise this liability in real terms. Most of the students get jobs below 10 lakhs per Annam and after tax and living in metros they can not save over 20-30 thousands per month to pay for the bank loan. It takes almost 3-5 years to pay back the loan if everything goes well. But it takes away the freedom of these graduates to do anything different for the period they have this liability. These loans are only available with parents' co-obligation and collateral which will not be possible for poor. So they will still live without degrees.
Lastly, there is already scarcity of good faculty in India so even if good university try to impart quality education in India, it will not work. Most of the faculty around the world will not think of settle down in India.
Dream of quality education to all will remain dream even if the education sector is open to foreign universities. Best solution could have been to let the corporate houses or rich individuals to adopt the universities or departments from the struggling universities in India. They can provide the much needed cash to these universities and guidance and vision to succeed.
First half of the argument, India does not have enough higher education institute, is true. But student leave India to study abroad for higher education is not completely true. Even if we have more universities in India, run by government of India or foreign universities, students will continue to go abroad for higher education. A large number of the students do not go abroad because they do not get admission in a good university in India but there are two other reasons. First, many of the students go abroad in search of settlement in a developed country. Second, they go to gain international exposure and come back. Whatever the situation of education in India. These two groups will continue to go abroad. Probably these two groups do not care too much about the degree as such as other objectives of studying in a foreign university.
We already have many universities in India. Problem with a large number of them is that they have no quality education. So, if we are inviting the foreign universities to create the environment of competition then it is unlikely to happen. The universities who will first setup 'shops' (or the campuses) in India will be the 'B' or 'C' grade universities from abroad who needs money to fund their operation in their home countries. It is very unlikely that MIT, Stanford, LSE. Oxford, Yale or Stephen Hokinks Medical Center will come to setup campuses in India.
So the students who go to foreign universities will still go and the quality of education will still not improve. What's the point of opening the education sector to foreign universities? Many of the students will get into the advertising trap of getting degree from foreign university and will pay huge tuition fees. These students and their parents will be one to suffer the most. As we have seen in case of ISB, Indian School of Business. It is not run by foreign universities but the tuition fee is almost as high as in any business school around the world for one year course. It is still successful because it is created by the business groups to have some management trainees and later manager. But every school can not be so successful.
Other problem is that these universities will charge higher tuition fee that most of the middle and lower class (most of the population of India lie in that category) will not be able to afford it. Government though the nationalised bank can provide soft education loans to students. But mind you, loan is a liability for the students and not the university. Students will get degree from foreign university with little value and they will carry huge financial liability. In case of ISB, students can take education loan upto 20 lakhs from banks. We need to realise this liability in real terms. Most of the students get jobs below 10 lakhs per Annam and after tax and living in metros they can not save over 20-30 thousands per month to pay for the bank loan. It takes almost 3-5 years to pay back the loan if everything goes well. But it takes away the freedom of these graduates to do anything different for the period they have this liability. These loans are only available with parents' co-obligation and collateral which will not be possible for poor. So they will still live without degrees.
Lastly, there is already scarcity of good faculty in India so even if good university try to impart quality education in India, it will not work. Most of the faculty around the world will not think of settle down in India.
Dream of quality education to all will remain dream even if the education sector is open to foreign universities. Best solution could have been to let the corporate houses or rich individuals to adopt the universities or departments from the struggling universities in India. They can provide the much needed cash to these universities and guidance and vision to succeed.
Monday, June 08, 2009
Indian students attacked in Australia, a cause of concern
There have been a series of attacked on the Indian students studying in Australia. This has started a debate in Indian media about the safety of Indian students in Australia. These attacks have been allegedly racial and this is cause of concern for the Governments of both the countries and the students in Australia. But some as usual the matter seems to be blown out of proportion and BJP leader is demanding to send young MPs to Australia to reassure the Indian students of their safety. I have talked with some of the students their but for them life seems as normal. We should not forget that every, in a fact a large number of them, Indian student in Australia is not from very rich family background and they work part time in till late night or early morning as cab drivers and in shops. It is difficult to secure each and every person walking after midnight in most of the cities around the world. Burglars would like to use such opportunity and these attacks or robberies do not need to motivated by racial discrimination but by opportunity. It has also come to notice that the students being targeted were generally living in the suburbs and not in or near the cities to save money.
India can not do much for the safety of the Indian in other countries, including Australia. Though the government can raise the issue through diplomatic channels and apparently, Prime minister Manmohan Singh has already talked to his counterpart in Australia, Kevin Rudd and asked for safety for the Indian students. If India really thinks that Australia is dangerous and racist place then the government can issue travel advisory to the citizens of India to avoid Australia.
At the same time, it is serious issue for the government of Australia. Though they do not have many good university but their efforts to attract foreign students have been largely successful and education sector has become third largest ($13.7 billions) contributor to Australia's foreign exchange. Issue of foreign students have been raised earlier as well by other countries including China.
Source: Australian Bureau of Statistics 2008
It is very much possible that some anti-social elements are exploiting the venerable international students but this can hurt the brand image of Australia (and New Zealand as well) as center for higher education. Government of Australia need to find out the cause of these attacks and try to resolve the issues with the help of universities and local administration. Huge amount of foreign earning is at stack so if image control is not done properly other countries, e.g. Canada, might get bigger share of the 'education export' sector.
India can not do much for the safety of the Indian in other countries, including Australia. Though the government can raise the issue through diplomatic channels and apparently, Prime minister Manmohan Singh has already talked to his counterpart in Australia, Kevin Rudd and asked for safety for the Indian students. If India really thinks that Australia is dangerous and racist place then the government can issue travel advisory to the citizens of India to avoid Australia.
At the same time, it is serious issue for the government of Australia. Though they do not have many good university but their efforts to attract foreign students have been largely successful and education sector has become third largest ($13.7 billions) contributor to Australia's foreign exchange. Issue of foreign students have been raised earlier as well by other countries including China.
Source: Australian Bureau of Statistics 2008It is very much possible that some anti-social elements are exploiting the venerable international students but this can hurt the brand image of Australia (and New Zealand as well) as center for higher education. Government of Australia need to find out the cause of these attacks and try to resolve the issues with the help of universities and local administration. Huge amount of foreign earning is at stack so if image control is not done properly other countries, e.g. Canada, might get bigger share of the 'education export' sector.
US protectionism, Indian IT companies hiring in USA and Eurupe
Recession has given a chance to the developed countries to use protectionism measure to save their economy and jobs. Though these are in contrast to the what these developed western countries were preaching to the developing economies but they have freedom to choose what they want as they have resources and consumer demand. Indian IT companies are very much worried from this trend and have been quite vocal to oppose any such action. Azim Premji has gone to the length of suggestion that if US will use protectionism then the US will be chocked of talent and it will start a trade war with the India and China. Though China does not seem to cooperate with India on many trade issue but Premji tried to use the weight it carries.
In the hindsight these IT companies owned by Indian are taking precautionary steps. First, they have not used the H1B visa aggressively for next year. Though the argument is that recession has hit the demand for H1B but if it was not protectionism, these companies would have applied for H1B visa just for the sake of holding these visa and use in later years when the economy improves. Second and more controversial step these companies are taking is that they are recruiting in US and European markets. For example, TCS has hired over 1000 non-Indian in last one year. Infosys bought Axon group last year and now it is eyeing more companies in US and Europe for acquisition. Though there is nothing wrong in acquiring foreign firms and/or hiring people of any nationality for any multinational company but the irony is that these companies do not accept the fact that they use India as their base because they get cheap labourers (or employees). When a foreign listed multinational firm opens a center in India, China or Vietnam, they are honest to acknowledge that they coming to these countries to use cheap labour and relaxed regulations.
Indian companies use the arguments that US does not have talent but now they are able to recruit and acquire companies in US and Europe. On the other hand in India, they try to represent the only hope for the aspiring middle class families. Graduate from any educational stream end up getting jobs in IT and BPO sector as they get paid better than in other sectors and a chance to go to US on on sight projects. These companies are using business practices to maximize their profit and return to shareholders (or stakeholders) but arguing that the Government of India will/should have trade war with the western countries to safe guard the interest of private companies is too much to expect.
In the hindsight these IT companies owned by Indian are taking precautionary steps. First, they have not used the H1B visa aggressively for next year. Though the argument is that recession has hit the demand for H1B but if it was not protectionism, these companies would have applied for H1B visa just for the sake of holding these visa and use in later years when the economy improves. Second and more controversial step these companies are taking is that they are recruiting in US and European markets. For example, TCS has hired over 1000 non-Indian in last one year. Infosys bought Axon group last year and now it is eyeing more companies in US and Europe for acquisition. Though there is nothing wrong in acquiring foreign firms and/or hiring people of any nationality for any multinational company but the irony is that these companies do not accept the fact that they use India as their base because they get cheap labourers (or employees). When a foreign listed multinational firm opens a center in India, China or Vietnam, they are honest to acknowledge that they coming to these countries to use cheap labour and relaxed regulations.
Indian companies use the arguments that US does not have talent but now they are able to recruit and acquire companies in US and Europe. On the other hand in India, they try to represent the only hope for the aspiring middle class families. Graduate from any educational stream end up getting jobs in IT and BPO sector as they get paid better than in other sectors and a chance to go to US on on sight projects. These companies are using business practices to maximize their profit and return to shareholders (or stakeholders) but arguing that the Government of India will/should have trade war with the western countries to safe guard the interest of private companies is too much to expect.
Wednesday, June 03, 2009
JuD Chief Mr Saeed released by a Pakistan court, Should India criticise?
It is fashionable in Indian foreign ministry to criticise whatever happens in Pakistan. Jamaat ul Daawa (JuD) chief was released by the court after finding no valid evidence or arguments by the public prosecutor to detain him.
Why India is criticising this decision by the court? If India wants a civil society in Pakistan India needs to let them work and operate as a civil society. It is right of every citizen (of not people) of Pakistan to defend themselves in the court. Is India not providing legal aid and security to Mumbai attack accuse Ajmal Qasab. He is not even Indian citizen. India is doing it because India claim to be a civilised society and want to follow proper legal process to execute someone if proven guilty.
At the first place, Mr. Saeed was not arrested, he was under house arrest. Pakistan government had taken this precautionary step after receiving UN's directive to ban the group. But the UN directive, apparently, did not categorically asked to put the chief under house arrest. India did not requested his arrest and apparently has not given any evidence that can prove that he was responsible for Mumbai attack. Pakistan government is saying that the Indian authorities have not yet provided evidences in English language. They are in Hindi and Marathi. If this allegation is true than what the Indian authorities doing and expect from Pakistan? They are not suppose to get translator and interpret themselves.
On top of everything, government of Pakistan has already said that they will challenge the high court decision in the Supreme court. It is not true to say that the Pakistan government is not serious against handling terrorism. They need time and need to follow process as well.
What India is doing is calling someone in US administration every day for everything. Can India not do direct talk with Pakistan? If the American pressure does not work than India has no other option. By calling American administration, India is making USA important third party in the troubled relationship between two neighbours. Calling for international pressure through UN is different thing but involvement of USA is not good. For almost 50 years we have argued that we do not need third party in our discussion with Pakistan and now this government is all set to change the foreign policy.
Why India is criticising this decision by the court? If India wants a civil society in Pakistan India needs to let them work and operate as a civil society. It is right of every citizen (of not people) of Pakistan to defend themselves in the court. Is India not providing legal aid and security to Mumbai attack accuse Ajmal Qasab. He is not even Indian citizen. India is doing it because India claim to be a civilised society and want to follow proper legal process to execute someone if proven guilty.
At the first place, Mr. Saeed was not arrested, he was under house arrest. Pakistan government had taken this precautionary step after receiving UN's directive to ban the group. But the UN directive, apparently, did not categorically asked to put the chief under house arrest. India did not requested his arrest and apparently has not given any evidence that can prove that he was responsible for Mumbai attack. Pakistan government is saying that the Indian authorities have not yet provided evidences in English language. They are in Hindi and Marathi. If this allegation is true than what the Indian authorities doing and expect from Pakistan? They are not suppose to get translator and interpret themselves.
On top of everything, government of Pakistan has already said that they will challenge the high court decision in the Supreme court. It is not true to say that the Pakistan government is not serious against handling terrorism. They need time and need to follow process as well.
What India is doing is calling someone in US administration every day for everything. Can India not do direct talk with Pakistan? If the American pressure does not work than India has no other option. By calling American administration, India is making USA important third party in the troubled relationship between two neighbours. Calling for international pressure through UN is different thing but involvement of USA is not good. For almost 50 years we have argued that we do not need third party in our discussion with Pakistan and now this government is all set to change the foreign policy.
STPI tax holiday set to end, Indian IT companies worried
Indian IT companies have register phenomenal growth over last 15 years. Though it is argued that this growth is result of less intervention by the government in this industry but on the contrary facts suggest that this one of the most favour industry in India. These companies were, and still, enjoying the STP (Software Technology Park) tax holiday for over 15 years. This holiday allowed the companies to avoid paying any tax for their new unit for first 10 years. Big companies like Infosys, TCS, Wipro and Satyam etc kept opening new units around the country to avoid paying taxes. This benefit is expected to cease in March 2010. Big IT companies are lobbying through Nasscom and individually to get extension for another 5 years.
IT companies are arguing that this is difficult economic time and some other Asian countries (China, Russia, Philippines etc) are developing their IT sector very rapidly and giving tough competition to Indian IT companies. Other argument is that IT is giving jobs to hundreds of thousands every year and if the sector growth is slowed down then these jobs will not be there. Nasscom has done some study that suggest that in next one decade the industry will grow to five times and employ over 50 millions people, directly and indirectly. All these are emotional blackmailing tricks of the IT companies in India.
First of all, if the STP tax holiday is not extended then the companies will need to pay taxes but only on their profits and not revenue. These companies are currently earning net profit over 20%. This net margin is well above many industries and even much higher for IT industry in other countries. Arguments claiming that the competitiveness will be lost if they have to pay tax is illogical. Only problem is for the owner and the shareholders. They will earn less and may be IT sector will not remain as attractive in the stock market.
Secondly, employment growth will not remain high for next 10 years for various reasons. we do not have infrastructure and resources to produce to many software engineers at first place. Even if we open more institutes for IT diplomas, what is the guarantee that the Companies in India (not Indian companies only) will continue to get contracts. Why the companies in Philippines and Vietnam get outsourcing work? Are we better than them? Most of the outsourcing work comes to India or anywhere else because of the cheap labour and not because we have better engineers than in USA or Europe. Our competitive advantages are we are cheaper and speak English. East Asian countries can be cheaper than us so the first competitive advantage is gone. We speak English but so do the people of Vietnam and other countries. They speak accented English so do we. There is no way we can stop these countries to become center for future IT outsourcing. This will hamper the IT growth in India.
Thought the IT industry has given jobs to many youths but its high salaries and life style and long working hours have developed many psychological disorders. Some studies have shown that over 20% IT workers have some kind of depression or mental disorder. Many a time this is because of the work pressure or doing some work they do not like or understand. A lot of IT workers are in the industry because they get higher salary and not because they like this job.
There is no valid argument from the industry for the government to consider their request to extend the tax holiday. When other companies are liable to pay corporate tax these IT companies should pay tax as well. The earning from these taxes can be utilise to promote other industries or social welfare.
IT companies are arguing that this is difficult economic time and some other Asian countries (China, Russia, Philippines etc) are developing their IT sector very rapidly and giving tough competition to Indian IT companies. Other argument is that IT is giving jobs to hundreds of thousands every year and if the sector growth is slowed down then these jobs will not be there. Nasscom has done some study that suggest that in next one decade the industry will grow to five times and employ over 50 millions people, directly and indirectly. All these are emotional blackmailing tricks of the IT companies in India.
First of all, if the STP tax holiday is not extended then the companies will need to pay taxes but only on their profits and not revenue. These companies are currently earning net profit over 20%. This net margin is well above many industries and even much higher for IT industry in other countries. Arguments claiming that the competitiveness will be lost if they have to pay tax is illogical. Only problem is for the owner and the shareholders. They will earn less and may be IT sector will not remain as attractive in the stock market.
Secondly, employment growth will not remain high for next 10 years for various reasons. we do not have infrastructure and resources to produce to many software engineers at first place. Even if we open more institutes for IT diplomas, what is the guarantee that the Companies in India (not Indian companies only) will continue to get contracts. Why the companies in Philippines and Vietnam get outsourcing work? Are we better than them? Most of the outsourcing work comes to India or anywhere else because of the cheap labour and not because we have better engineers than in USA or Europe. Our competitive advantages are we are cheaper and speak English. East Asian countries can be cheaper than us so the first competitive advantage is gone. We speak English but so do the people of Vietnam and other countries. They speak accented English so do we. There is no way we can stop these countries to become center for future IT outsourcing. This will hamper the IT growth in India.
Thought the IT industry has given jobs to many youths but its high salaries and life style and long working hours have developed many psychological disorders. Some studies have shown that over 20% IT workers have some kind of depression or mental disorder. Many a time this is because of the work pressure or doing some work they do not like or understand. A lot of IT workers are in the industry because they get higher salary and not because they like this job.
There is no valid argument from the industry for the government to consider their request to extend the tax holiday. When other companies are liable to pay corporate tax these IT companies should pay tax as well. The earning from these taxes can be utilise to promote other industries or social welfare.
Monday, June 01, 2009
GM bankrupcy and US government role in car industry
After a long drama of almost 6 months, General Motors (GM) has finally filed for chapter 11 (bankruptcy) protection in the court. Detroit sees thousands of bankruptcy every year and Chrysler did file its protection last month but did not made such a big news. There is something more fundamental that makes GM different from any other company in the US car industry. It was symbol of American success and capitalism. It was and still linked to the people psyche in the US. No one would have ever thought that GM will go bankrupt and now they are shocked and still optimistic that it will emerge stronger and better in three months. But it raises many questions on the American dream and American way of development.
The whole argument to save GM is revolving around the assumption that the Car industry is vital for the US economy and the people. I will divide my arguments in two separate streams (Either car industry is important or not) from here and discuss why the role US government is playing is not the right way to deal with the circumstances.
First, lets discuss why the Car industry in the current form is important? Car industry started over hundreds years back. It has seen boom and bust cycles many times in last century but no one ever raised the question about the concept of car in itself. There has not been any revolutionary innovation in the Car industry or I should say 'mode of transportation'. I believe car is not important in itself rather people look for mode of transportation. There have been many scientific innovation in every field and after serving its purpose when a new and better technology that might be completely different from the earlier one comes earlier innovations become irrelevant. When the television came, radio became less important. Internet has entered many domains (e.g. entertainment, news, retail, etc) and the earlier versions have become less important or have learned to live with new realities. Digital camera has made analog camera extinct. By the same logic, why the car industry should exist for ever. It has lived for over a century not because it had competency to do so but the government protection and support have made this possible. Governments have made highways, ignoring public transport system, using tax payers money so that people can travel long distance in car. Government charged very low taxes on the oil imports so that people can get it for cheap and consume more. Emphasis has always been to consume more at lower price so that the oil exporting countries get constant revenue. Last year when the oil prices went up and touched $150, in a free economy it should not be of much worry because people should have decreased the consumption and the oil exporting countries should get the same revenue. But the oil importing countries, USA and Europe, have developed their economy around the Car industry. If the people will use less car and buy less cars then what they will do? it will break the fictional cycle of development and GDP growth. So the Western governments need to keep this cycle alive. Even if using more fuel and cars is dangerous for our environment.
There is a hard reality otherwise. We like it or not, Car industry can not work in current for. If we continue to use oil at the same rate as we using now then the oil reserves will dry in a few decades time. So ultimately we have to let the current car industry die its natural death sooner or later. So by protecting a company, this industry can not be saved forever. This is what the government is not ready to accept and can not think beyond 4 years or 20 years.
For the sake of argument, if we assume that the car industry is important and we need to save this at any cost even then the approach take by the US government is not correct. Washington is giving argument that they need to save this company or industry to save millions of jobs in the country. If the jobs are important then why they need to save a particular company that is inefficient and have failed. It is not cheap to save this company even if they succeed as they are claiming. It will cost US $50 billion to the US tax payers and there is no guarantee that more money will not be pumped into it in future. If the Japanese companies are more efficient and can produce car for less in US then why they should not be let expand their operation? Yes, government needs to see national interests and jobs. but the government can design and implement regulatory framework that force the foreign owned companies to move jobs to US for Car industry. These efficient companies can be given financial incentives. These incentives would have not cost whopping US $50 billions. US workers are worried about jobs as anyone but they are worried to work for only for GM. They will be happy to work in Toyota plant as well.
Effectively, US has nationalised GM. Though the politicians are saying that they will interfere in day-to-day business of the company but they will not let the company make decision purely based on economics either. Is this is beginning of socialist US? only time will tell us but chances are it will be proved wrong step by the US government.
The whole argument to save GM is revolving around the assumption that the Car industry is vital for the US economy and the people. I will divide my arguments in two separate streams (Either car industry is important or not) from here and discuss why the role US government is playing is not the right way to deal with the circumstances.
First, lets discuss why the Car industry in the current form is important? Car industry started over hundreds years back. It has seen boom and bust cycles many times in last century but no one ever raised the question about the concept of car in itself. There has not been any revolutionary innovation in the Car industry or I should say 'mode of transportation'. I believe car is not important in itself rather people look for mode of transportation. There have been many scientific innovation in every field and after serving its purpose when a new and better technology that might be completely different from the earlier one comes earlier innovations become irrelevant. When the television came, radio became less important. Internet has entered many domains (e.g. entertainment, news, retail, etc) and the earlier versions have become less important or have learned to live with new realities. Digital camera has made analog camera extinct. By the same logic, why the car industry should exist for ever. It has lived for over a century not because it had competency to do so but the government protection and support have made this possible. Governments have made highways, ignoring public transport system, using tax payers money so that people can travel long distance in car. Government charged very low taxes on the oil imports so that people can get it for cheap and consume more. Emphasis has always been to consume more at lower price so that the oil exporting countries get constant revenue. Last year when the oil prices went up and touched $150, in a free economy it should not be of much worry because people should have decreased the consumption and the oil exporting countries should get the same revenue. But the oil importing countries, USA and Europe, have developed their economy around the Car industry. If the people will use less car and buy less cars then what they will do? it will break the fictional cycle of development and GDP growth. So the Western governments need to keep this cycle alive. Even if using more fuel and cars is dangerous for our environment.
There is a hard reality otherwise. We like it or not, Car industry can not work in current for. If we continue to use oil at the same rate as we using now then the oil reserves will dry in a few decades time. So ultimately we have to let the current car industry die its natural death sooner or later. So by protecting a company, this industry can not be saved forever. This is what the government is not ready to accept and can not think beyond 4 years or 20 years.
For the sake of argument, if we assume that the car industry is important and we need to save this at any cost even then the approach take by the US government is not correct. Washington is giving argument that they need to save this company or industry to save millions of jobs in the country. If the jobs are important then why they need to save a particular company that is inefficient and have failed. It is not cheap to save this company even if they succeed as they are claiming. It will cost US $50 billion to the US tax payers and there is no guarantee that more money will not be pumped into it in future. If the Japanese companies are more efficient and can produce car for less in US then why they should not be let expand their operation? Yes, government needs to see national interests and jobs. but the government can design and implement regulatory framework that force the foreign owned companies to move jobs to US for Car industry. These efficient companies can be given financial incentives. These incentives would have not cost whopping US $50 billions. US workers are worried about jobs as anyone but they are worried to work for only for GM. They will be happy to work in Toyota plant as well.
Effectively, US has nationalised GM. Though the politicians are saying that they will interfere in day-to-day business of the company but they will not let the company make decision purely based on economics either. Is this is beginning of socialist US? only time will tell us but chances are it will be proved wrong step by the US government.
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