Land has been an ancient and practised investment avenue for all economies . Yet, its valuation, globally has been a matter of conjecture.
The present Land Acquisition Bill being proposed by the UPA government has seen pretty extreme views from its proponents as well as opponents. Put very simply, the proposition in the bill sets out an auction process by prospective acquirers for land –the proceeds of which are to be distributed among the holders of the property. It is also proposed to devolve more powers to local governing bodies in the auctioning process.
It is interesting to note though that both parties to the debate agree on the two major flaws in the current acquisition process. Firstly, at present, the government acquires land for creating SEZs or industrial development complexes (IDCs) at prevailing market rates for land in the adjoining areas and distributes it to the industrialists coming up with Greenfield Projects . Along with a supposedly hassle free allotment of land, they also receive massive waivers/cuts in taxes , subsidies in input costs of power , water and rentals . This easy sailing that industrial houses have in their infancy , particularly very soon after the acquisition of land , when sensitivities of the deprived run high gives rise to the perception, real or otherwise, that the deal is botched.
Secondly, the present process is almost unilateral in vesting the powers of decision making related to acquisition in State Governments promoting the project. Local Governance , whether it is at the level of Panchayat or Tribal Advisory Councils , has no role in deciding at what rates, on what terms and how acquisition process will take place. The more are the layers between the decision makers and the affected , even in a democracy, the greater is the room for obfuscation, arbitrariness and discretion in land allocation process. The fears of a big state , some true and some stoked by alarmists , begin to jettison the process.
In essence, both the concerns are a direct outcome of the lack in transparency in the process. The debate centres on whether the current legislation creates more room for transparency or further compounds the scope for arbitrariness.
Currently, the government acquires land at prevailing market prices. Even considering the fact that exercise of price determination is done with due diligence and does even factor in the exact probability of appreciation in the prices once the project begins to mature , the state’s guess is as good as fortune teller’s . It is an established fact that project valuations vary from one study to the next and possibility of speculation on future values and mismatch in valuation can never be ruled out. What makes this process worse is that the government bears all risks of being exposed to public anger and dissatisfaction if prices in the future for land asset outstrip those paid as compensation initially . The corporates, on the other hand, set to profit from this speculative rise in property prices as a result of project development and can actually due to their deeper penetration of asset markets , book profits and exit out by selling the entire property once acquired, as a single consolidated asset, something that is beyond individual holders’ capacity .
This system that pins all responsibility on the state and offers nearly unopposed profit incentives to the corporates , besides cost subsidies is at the root of this conflict.
Where competitive bidding of auction clears the fog is in transferring the responsibility of land valuation from the government to the industry . Any industrialist , in an auction process for land, beginning with the pre-decided base price , is free to decide what he is willing and able to pay for the future flows of income from that property . Auctioning through competitive bidding is expected to bring in more transparency and responsibility from the corporate side in the land acquisition process. Assuming that the base price in the auctioning process proposed is likely to be set at prevailing market rates, this process is expected to witness a greater and more fair compensation to land holders . This would placate those concerned about the unfair economics in terms of input subsidies granted to Greenfield projects during the gestation period.
Bringing in local governing bodies as main arbiters in deciding the terms of acquisition and vesting in them responsibility for distribution of compensatory allocation is another move that could reduce frictions in land acquisitions. For one, distribution of compensation will more accountable with authorities in this case being more connected to the local communities than state bureaucrats and peer review and community vigilance will reduce the opportunities for corruption and wastage that otherwise arise in a hierarchical system.
Another plus of the process is that it simplifies the communication between the buyer and the seller. The terms of agreement in this process will be framed considering the negotiation for genuine concerns of the displaced and not exigencies of federal politics. It also softens the resistance to acquisitions as it brings down the facts and prospects of development right to the intended beneficiaries of the process.
It is when this debate about the future of communities facing acquisitions is taken to them , that the process of economic progress will be privy to more informed arguments about this evolving system , freeing itself from being tossed around between ideological shibboleths of Regressive Activism and industry-state nexus that has come to dominate the discourse.
Monday, February 28, 2011
Monday, August 30, 2010
Reverse Bank of Inflation
When we talk of inflation, a lot of attention is focussed on Reserve Bank’s monetary policy and how it needs to be wise and ahead of the curve.
Few problems in our economy are those of the nature those of the nature that can be solved using basic demand supply analysis of capital and acting in the desired direction. Inflation , as such, which even the Governor acknowledges , still depends a lot on the agricultural economy post-monsoon. To this end, RBI’s policy is merely an analgesic numbing inflationary pains while the real economy recovers .
The statement of Governor and even everyday experience , pins down inflation to its obvious provocateurs –agricultural inefficiency and deregulation of oil prices.
Yes, it is true that agriculture has been the lost chapter in our growth story, but to pin down the problem mainly to agricultural inefficiency is to miss the real reason on how factors that seem distinctly unrelated and even inimical to agriculture are aggravating a demand driven price rise of a very systemic order.
Consider for example that price hike of Rs. 3/litre on petroleum based fuels that was allowed as the first step towards rolling back subsidies given to the energy sector. To accuse all of price rise woes on this single act would be to ignore the problem of development of infrastructure in terms of road, rolling stock and efficient local market mechanisms for essential commodities that has perpetuated the crisis even before oil prices were deregulated.
Oil subsidy is a burden on exchequer that needs to be rolled back in long-term interests of the economy to help develop more efficient alternative markets for energy that are competitive , progressive and dynamic .
Preventing fair pricing of oil is only delaying the modernization and innovation of energy sector by not allowing the consumers to bear the direct cost of their consumption. Subsidization of oil consumption also makes it less lucrative for private companies to enter the market, leaving the sector to state managed public giants whose losses are compensated by the sale of oil bonds.
The move for de-regulation in oil prices is like a teething trouble that adolescent India will have to bear. What surely can be ameliorated is the pathetic state of national road transport network that has seen growth that can only be termed as marginal when juxtaposed with economy’s needs.
Indian Railways’ rolling stock when it comes to capacity building in freight carriage has been sidelined in the favour of populist agendas and dozens of intercity expresses plying between pet constituencies. Major ports have been accumulating losses over the years and an inland waterways development network is stalled by Inter-state water disputes.
It is these pressures of infrastructural under development that are responsible for a long term, steady price rise. Any emerging economy will have huge income disparities and as a result a situation develops where the more affluent , progressive sections multiply their consumption demand over years to move up the socio-economic ladder.
The ones worst hit are people on the wrong side of this disparity who become victims of demand pressures of an affluent society and infrastructural deficiency.
The artificially protected oil prices regime is being defended valiantly by auto sector lobbies. Cheap car loans to serve a demand spike riding on sheltered fuel prices have adversely affected credit allocation by banks to more enduring investments in education and healthcare.
An overview of education loans being forwarded by lending institutions is a testimony to how out of step have our practices been with the much avowed policy declarations of social and economic transformation by 2020.
A simple education loan in India for pursuing higher technical degree in a modest domestic institution costs anywhere between 10.5-13% against this loan is demanded a collateral almost 70-80% (if not in terms of present assets owned by you, the your future ability to earn) of the amount forwarded .In the payment period, this loan turns itself over anything between 2-2.5 times.
Considering the exorbitant amount the lender pays to unburden himself from his liabilities, it seems sensible , if he can , liquidate his collateralized asset and meet his obligations instead of opting for a loan. What is amusing and even ironical at the same time is the fervour with which loans of a more consumerist kind- cars, luxury homes, electrical appliances are being advertised at much lower rates where the economic value of such investments is far lower than that of education and possibly , in a pessimistic sense , nothing but more foam to the consumption bubble.
So, the question is –Will it be fair to hold the Reserve Bank culpable for all those shooting prices? Unfortunately, we live in times where we trust them the least in whom the Constitution vests the most power. The hysteria around RBI’s policy reviews is a subconscious manifestation of our trust deficit in the government .Honestly, we need to give the regulator the credit for its labours in the decade past and it would be unfair to expect it to plaster all the leaking walls. Whether it does well this time round, we can conjecture and remain optimistic But something needs to be done to alleviate the ailments that lie outside RBI’s ambit.
Shailesh
Few problems in our economy are those of the nature those of the nature that can be solved using basic demand supply analysis of capital and acting in the desired direction. Inflation , as such, which even the Governor acknowledges , still depends a lot on the agricultural economy post-monsoon. To this end, RBI’s policy is merely an analgesic numbing inflationary pains while the real economy recovers .
The statement of Governor and even everyday experience , pins down inflation to its obvious provocateurs –agricultural inefficiency and deregulation of oil prices.
Yes, it is true that agriculture has been the lost chapter in our growth story, but to pin down the problem mainly to agricultural inefficiency is to miss the real reason on how factors that seem distinctly unrelated and even inimical to agriculture are aggravating a demand driven price rise of a very systemic order.
Consider for example that price hike of Rs. 3/litre on petroleum based fuels that was allowed as the first step towards rolling back subsidies given to the energy sector. To accuse all of price rise woes on this single act would be to ignore the problem of development of infrastructure in terms of road, rolling stock and efficient local market mechanisms for essential commodities that has perpetuated the crisis even before oil prices were deregulated.
Oil subsidy is a burden on exchequer that needs to be rolled back in long-term interests of the economy to help develop more efficient alternative markets for energy that are competitive , progressive and dynamic .
Preventing fair pricing of oil is only delaying the modernization and innovation of energy sector by not allowing the consumers to bear the direct cost of their consumption. Subsidization of oil consumption also makes it less lucrative for private companies to enter the market, leaving the sector to state managed public giants whose losses are compensated by the sale of oil bonds.
The move for de-regulation in oil prices is like a teething trouble that adolescent India will have to bear. What surely can be ameliorated is the pathetic state of national road transport network that has seen growth that can only be termed as marginal when juxtaposed with economy’s needs.
Indian Railways’ rolling stock when it comes to capacity building in freight carriage has been sidelined in the favour of populist agendas and dozens of intercity expresses plying between pet constituencies. Major ports have been accumulating losses over the years and an inland waterways development network is stalled by Inter-state water disputes.
It is these pressures of infrastructural under development that are responsible for a long term, steady price rise. Any emerging economy will have huge income disparities and as a result a situation develops where the more affluent , progressive sections multiply their consumption demand over years to move up the socio-economic ladder.
The ones worst hit are people on the wrong side of this disparity who become victims of demand pressures of an affluent society and infrastructural deficiency.
The artificially protected oil prices regime is being defended valiantly by auto sector lobbies. Cheap car loans to serve a demand spike riding on sheltered fuel prices have adversely affected credit allocation by banks to more enduring investments in education and healthcare.
An overview of education loans being forwarded by lending institutions is a testimony to how out of step have our practices been with the much avowed policy declarations of social and economic transformation by 2020.
A simple education loan in India for pursuing higher technical degree in a modest domestic institution costs anywhere between 10.5-13% against this loan is demanded a collateral almost 70-80% (if not in terms of present assets owned by you, the your future ability to earn) of the amount forwarded .In the payment period, this loan turns itself over anything between 2-2.5 times.
Considering the exorbitant amount the lender pays to unburden himself from his liabilities, it seems sensible , if he can , liquidate his collateralized asset and meet his obligations instead of opting for a loan. What is amusing and even ironical at the same time is the fervour with which loans of a more consumerist kind- cars, luxury homes, electrical appliances are being advertised at much lower rates where the economic value of such investments is far lower than that of education and possibly , in a pessimistic sense , nothing but more foam to the consumption bubble.
So, the question is –Will it be fair to hold the Reserve Bank culpable for all those shooting prices? Unfortunately, we live in times where we trust them the least in whom the Constitution vests the most power. The hysteria around RBI’s policy reviews is a subconscious manifestation of our trust deficit in the government .Honestly, we need to give the regulator the credit for its labours in the decade past and it would be unfair to expect it to plaster all the leaking walls. Whether it does well this time round, we can conjecture and remain optimistic But something needs to be done to alleviate the ailments that lie outside RBI’s ambit.
Shailesh
Sunday, July 11, 2010
Pinching where it hurts
Mango harvests, the local wisdom maintains in Bihar, follow a biannual cycle of plentiful and inadequate produce. I arrive at this place in one of the fortunate halves of this cycle. One part sickly-sweet and one part rotten smell hangs in the streets as you pass by trees bent down with this year’s bloom. Seventy percent of millions of kilograms of export quality mangoes around me will either be sold at pebble-rates or will never make it to the market.
It isn’t a one off sight in rural India- I have seen crude pyramids of potatoes lying unclaimed on the roadside along Delhi-Agra highway last June. Come July and you’d see kilos of tomato produce decaying beside the motorways connecting Jamshedpur and Ranchi. And as my newspaper tells me, farmers in Madhya Pradesh and Maharashtra often prefer incinerating their harvests of cotton and sugarcane to clear up land for next sowing season in the absence of attractive sale prices.
‘Cash’ Crops
Cultivation of cash and commercial crops has become a permanent feature of agriculture in post-Green Revolution India in more fertile areas of this country. Critics of new economic policy refute the cause-effect relation between sunrise manufacturing sector driven by consumer demand spurring commercialization of agriculture . Instead, they claim such a transition is a consequence of subtle coercion and superficial enticements in terms of cheap credit for modernization that has long been pushed by political and business lobbies with vested capitalist interests.
Whatever side of economic and social ideological divide one belongs to, it becomes unavoidable to look at the fall out of so-called well-intended and logical move towards modernization of agriculture and integrating it with the needs of a booming urban economy. Marginal farmers find loans turning toxic as enormous quantities of fibre crops , fruits , beverage and medicinal crops are sold away at throwaway prices. Hundreds commit suicide every year seeing no option out of a vicious cycle of credit consumption beyond means. Cold storage facilities and warehouses fall far short of harvest requirements or have charges prohibitively expensive for cultivators . Ubiquitous dumps of bumper produce and incineration of standing crops just highlights the disappointing ability of commercial crops to generate real profits for cultivators.
It has reinforced the clamour against liberal policies of post-1991 governments that allow agricultural imports at relaxed tariffs and has raised the spectre of a possible nexus between government and corporate out to expand their domination in what has traditionally been an autonomous , self-sustaining and organic sector for centuries .
A common mistake of comprehension in this issue is oversimplification of the state-of-affairs as a clash between tradition and sinful and amoral modernity , a battle between a fiercely autonomous farmer and a ruthlessly hegemonic corporate procurer. Compound this with the ideological prejudices we all invariably pick-up through experience and company, and we have already begun to erase away important evidences even before solving the case.
A less appreciated feature of this story has been the quantum leap in productivity – a result of application of modern scientific innovations in farming, made available to farmers through credit institutions , something that ironically has given them more reasons to worry about. It is the integration of this abundance in rural India with centres of cumulatively appreciating demand for consumer goods in urban areas that has eluded us so far.
In over-production and increasing yield per hectare we have an opportunity and in the absence of viable firms or institutions to act as intermediaries between demand and supply, we have a problem. The stage seems to be set for the rise of a new breed of entrepreneurs, from unconventional rural settings.
The demons within
I once had a conversation with an alumnus of BITS-Pilani, Mr. V.V.Ramanan- who is a social entrepreneur with special interest in development sector , where he repeatedly emphasised on the importance of ‘social conditioning’ as the foundation over which any entrepreneurial culture can be built.
Nowhere is this lack of social conditioning more evident than in North India , where most migrants from urban centres come from regions abundant in natural resources which in the past formed the back-bone of a pre-industrial economy.
The roots of caste stereotypes and hierarchy run so deep that it becomes virtually impossible for youth from non-mercantile castes to start entrepreneurial ventures.
Youth from backward communities running enterprises in villages often find themselves either boycotted or are forced to run their ventures only in impoverished quarters they inhabit – consequently being compelled to migrate to cities . The landed class and communities on the upper end of caste spectrum shun entrepreneurship on entirely different grounds. So deep is the fascination for a fail-safe “naukri “ and so high the regard for entitlements and privileges thrust upon them by their colonial masters and Hindu society , that most upper caste families would rather let their assets under-perform and feast on the nostalgia of old days than consider starting up.
The result- a thoroughly entrenched syndicate of oligopolist agricultural merchants who buy or reject produce at will from hapless farmers and sell the same at prices that ensure a super normal profit. In the region spread a 100 km around Patna, I discovered the turbulent landscape of these whimsical , cartelized prices as potatoes varied between Rs. 5 a kg in village haats to Rs. 20-22 per kilo in residential areas.
Obstacles outside
An eight hour power cut in urban areas has enough ammunition for media to blow it up into a crisis , but even fairly agriculturally advanced states like Haryana are hardly able to prevent an eight to twelve hour power outage from becoming a daily occurrence ( Frontline , 11 Oct 2009).
Storage facilities and warehouses fail as a result and run under-capacity with whatever alternative power arrangements at hand . The revolution in production has surely not been matched with a concomitant transformation in storage and handling.
Corruption as the bane of development , is the unsaid and pervasive enemy of agriculture as an emerging sector. I wouldn’t elaborate on a subject that has been meticulously researched and manifests itself with all its clichéd motivations across social and economic spheres including agriculture.
What really adds muscle to the arms of middlemen , whether in transportation , loan business or crop procurement is the enormous political clout of such lobbies that makes it difficult to dismantle local cartels through innovation , forcing businesses to step into dirty territory.
To lay a framework of acheivables for an aspiring entrepreneur requires more insight than from someone like yours truly who has been involved with rural communities in North India through CEL only over the last two years. Yet, even for a person of limited experience, the prospects of an entrepreneurial opportunity are conspicuous. Baby steps in this regard have even been dared by entrepreneurs – While working with TERI last year, I met some engineers from ACME India Pvt. Ltd, refrigeration experts and project partners of TERI . They had found an enthusiastic customer base for their chemically refrigerated carts which required no electricity , among the youth of districts bordering Gurgaon .Expansion in scale of such ventures and encouragement to innovation is eagerly awaited.
In fact, every time you shell out an exorbitant Rs. 40 for a kilo of tomatoes, remind yourself that there might be another quintal of red vegetable which could have been available to you at more reasonable rates- if only for an entrepreneur.
It isn’t a one off sight in rural India- I have seen crude pyramids of potatoes lying unclaimed on the roadside along Delhi-Agra highway last June. Come July and you’d see kilos of tomato produce decaying beside the motorways connecting Jamshedpur and Ranchi. And as my newspaper tells me, farmers in Madhya Pradesh and Maharashtra often prefer incinerating their harvests of cotton and sugarcane to clear up land for next sowing season in the absence of attractive sale prices.
‘Cash’ Crops
Cultivation of cash and commercial crops has become a permanent feature of agriculture in post-Green Revolution India in more fertile areas of this country. Critics of new economic policy refute the cause-effect relation between sunrise manufacturing sector driven by consumer demand spurring commercialization of agriculture . Instead, they claim such a transition is a consequence of subtle coercion and superficial enticements in terms of cheap credit for modernization that has long been pushed by political and business lobbies with vested capitalist interests.
Whatever side of economic and social ideological divide one belongs to, it becomes unavoidable to look at the fall out of so-called well-intended and logical move towards modernization of agriculture and integrating it with the needs of a booming urban economy. Marginal farmers find loans turning toxic as enormous quantities of fibre crops , fruits , beverage and medicinal crops are sold away at throwaway prices. Hundreds commit suicide every year seeing no option out of a vicious cycle of credit consumption beyond means. Cold storage facilities and warehouses fall far short of harvest requirements or have charges prohibitively expensive for cultivators . Ubiquitous dumps of bumper produce and incineration of standing crops just highlights the disappointing ability of commercial crops to generate real profits for cultivators.
It has reinforced the clamour against liberal policies of post-1991 governments that allow agricultural imports at relaxed tariffs and has raised the spectre of a possible nexus between government and corporate out to expand their domination in what has traditionally been an autonomous , self-sustaining and organic sector for centuries .
A common mistake of comprehension in this issue is oversimplification of the state-of-affairs as a clash between tradition and sinful and amoral modernity , a battle between a fiercely autonomous farmer and a ruthlessly hegemonic corporate procurer. Compound this with the ideological prejudices we all invariably pick-up through experience and company, and we have already begun to erase away important evidences even before solving the case.
A less appreciated feature of this story has been the quantum leap in productivity – a result of application of modern scientific innovations in farming, made available to farmers through credit institutions , something that ironically has given them more reasons to worry about. It is the integration of this abundance in rural India with centres of cumulatively appreciating demand for consumer goods in urban areas that has eluded us so far.
In over-production and increasing yield per hectare we have an opportunity and in the absence of viable firms or institutions to act as intermediaries between demand and supply, we have a problem. The stage seems to be set for the rise of a new breed of entrepreneurs, from unconventional rural settings.
The demons within
I once had a conversation with an alumnus of BITS-Pilani, Mr. V.V.Ramanan- who is a social entrepreneur with special interest in development sector , where he repeatedly emphasised on the importance of ‘social conditioning’ as the foundation over which any entrepreneurial culture can be built.
Nowhere is this lack of social conditioning more evident than in North India , where most migrants from urban centres come from regions abundant in natural resources which in the past formed the back-bone of a pre-industrial economy.
The roots of caste stereotypes and hierarchy run so deep that it becomes virtually impossible for youth from non-mercantile castes to start entrepreneurial ventures.
Youth from backward communities running enterprises in villages often find themselves either boycotted or are forced to run their ventures only in impoverished quarters they inhabit – consequently being compelled to migrate to cities . The landed class and communities on the upper end of caste spectrum shun entrepreneurship on entirely different grounds. So deep is the fascination for a fail-safe “naukri “ and so high the regard for entitlements and privileges thrust upon them by their colonial masters and Hindu society , that most upper caste families would rather let their assets under-perform and feast on the nostalgia of old days than consider starting up.
The result- a thoroughly entrenched syndicate of oligopolist agricultural merchants who buy or reject produce at will from hapless farmers and sell the same at prices that ensure a super normal profit. In the region spread a 100 km around Patna, I discovered the turbulent landscape of these whimsical , cartelized prices as potatoes varied between Rs. 5 a kg in village haats to Rs. 20-22 per kilo in residential areas.
Obstacles outside
An eight hour power cut in urban areas has enough ammunition for media to blow it up into a crisis , but even fairly agriculturally advanced states like Haryana are hardly able to prevent an eight to twelve hour power outage from becoming a daily occurrence ( Frontline , 11 Oct 2009).
Storage facilities and warehouses fail as a result and run under-capacity with whatever alternative power arrangements at hand . The revolution in production has surely not been matched with a concomitant transformation in storage and handling.
Corruption as the bane of development , is the unsaid and pervasive enemy of agriculture as an emerging sector. I wouldn’t elaborate on a subject that has been meticulously researched and manifests itself with all its clichéd motivations across social and economic spheres including agriculture.
What really adds muscle to the arms of middlemen , whether in transportation , loan business or crop procurement is the enormous political clout of such lobbies that makes it difficult to dismantle local cartels through innovation , forcing businesses to step into dirty territory.
To lay a framework of acheivables for an aspiring entrepreneur requires more insight than from someone like yours truly who has been involved with rural communities in North India through CEL only over the last two years. Yet, even for a person of limited experience, the prospects of an entrepreneurial opportunity are conspicuous. Baby steps in this regard have even been dared by entrepreneurs – While working with TERI last year, I met some engineers from ACME India Pvt. Ltd, refrigeration experts and project partners of TERI . They had found an enthusiastic customer base for their chemically refrigerated carts which required no electricity , among the youth of districts bordering Gurgaon .Expansion in scale of such ventures and encouragement to innovation is eagerly awaited.
In fact, every time you shell out an exorbitant Rs. 40 for a kilo of tomatoes, remind yourself that there might be another quintal of red vegetable which could have been available to you at more reasonable rates- if only for an entrepreneur.
Friday, May 14, 2010
मेरा सफ़र
This sample composition is a result of my efforts to bring to people attempted translations of Hindi and Hindustani (Hindi-Urdu) poems . Special Thanks to my sidey and literature lover Pratik Maheshwari who mined the web to retrieve a rare pdf copy of a English-Urdu Dictionary. It is a fact that Fitzgerald's translation of Omar Khayyam's Rubaiayat re-introduced the world to elegance of Persian poetry. Not harbouring any such ambitions myself, I see this as a humble endeavour to bring to you a self-translated poem by Ali Sardar Zafri - Mera Safar. As I leave college, the beauty of these lines some where strikes a chord.
Such a day will come,
The lamps of eyes will go out
And the lotuses of palm will wilt
And from the leaf of the tongue
The butterflies of speech will flutter away
Yet I will return here again
And speak from the mouths of children
Warble in the songs of birds
I'm but a fleeting moment
In time's bewildering magicdom
I sleep and awake
And fall asleep again
I am a play of many centuries
In death I find immortality
Shailesh
Such a day will come,
The lamps of eyes will go out
And the lotuses of palm will wilt
And from the leaf of the tongue
The butterflies of speech will flutter away
Yet I will return here again
And speak from the mouths of children
Warble in the songs of birds
I'm but a fleeting moment
In time's bewildering magicdom
I sleep and awake
And fall asleep again
I am a play of many centuries
In death I find immortality
Shailesh
Saturday, February 6, 2010
Riding the bubble
Last July, I met an educationist-turned- entrepreneur at a family gathering. Urbane , service class people, when they approach midlife in our part of the world ,often decide to settle in cities- selling off bulk of their ancestral property in villages to their sharecroppers. He had used the proceeds to set up three technical institutes in Rajasthan . The management is family-run, staff are home grown pass outs from these institutes and admission standards are not very stringent if you can afford the fee structure.In June-July the City Centre in Bokaro buzzes with agents from such technical institutes putting up in lodges, looking for prospective clients.
Good times carry their own risks. It is very difficult to distinguish between clarity and craziness ; publicity and exaggeration in a booming,competitive market. The first two decades of 21st century in India, when looked back at by historians , will show a conspicuous policy thrust at both Union and state level towards education infrastructure expansion - perhaps driven by demographic necessity since nothing essentially happens in a democracy when it is not desired by people. It may be a bit premature to predict the fate of this expansion , but there are signs that the private universities' entry in education sector might swell up into a mega bubble.
You might have perhaps by now come to realize that you'd find none of those cute looking girls who pose as students of these universities in their full page ads in national dailies. But then a bigger farce is played over the promised USPs printed in text. The terms of reference remain vague , unsubstantiated or even fake. As a UGC led probe found out in case of 44 such private universities in India , "virtual library " being promised by one of them was nothing but a computer center with internet , similarly there are others who exploit public ignorance to boast of exchange programmes with foreign universities that may actually be open to any student irrespective of his enrolment in that university. And then there are some more obfuscatory combinations of adjectives and nouns like "excellent placement" , "latest pedagogical techniques" , "state-of-the-art laboratories " that simply can't be measured objectively . A majority of such universities invariably offer engineering degrees.
NASSCOM came out with a very widely debated survey last year that found 75% of engineering graduates unemployable. Still the ground reality remains that engineers tend to get better and bigger white collar jobs with considerable ease. The employers of most of these apparently unemployable engineers are firms that export IT services and have more than 95% of their operations overseas. Number crunching or code weaving in mechanical fashion is an important attribute of these job profiles . The amazing figures posted as profits by this sector are both a result of depreciated value of rupee in terms of dollar that gives more rupee profit returns for every dollar earned and tax holidays provided by the state. Some time in this decade, both these factors are going to stop working in our favour and IT services will return to more balanced growth comparable with other sectors in the economy. Then , the training costs of ill-trained half-baked pass outs will begin to pinch. We can't risk unemployment on such a massive scale when half of the country's population will be under 35.
The reason unfair business practices and unscrupulous education sector entrepreneurs thrive is because of the strongly seductive charm of engineering not as a degree but as an investment. An admission into any engineering institute even at a cost of Rs. 7-10 lakh for four years guarantees a return (job) of 3-4 lakh rupees just on maturity (passing out).So as long as there are enough fathers who have children with mediocre aptitude for academics but enough appetite to take this risk, there will be no dearth of entrepreneurs raising money by selling off their idle property to set up private mom-and-pop universities.
Negation of an existing policy often seems to be the most definitive but undoubtedly the most fatal way to deal with an impending crisis. Reverting back to the days when higher education was primarily state-run , ostensibly to protect national interests from commercial will be denying ourselves the economies to be exploited from a young population.
Higher Education is inevitably moving from being a no profit activity to a business and that is the way it should be. But like all free markets, it should be promoted with adequate legal safeguards for consumers. In that sense, medical services and higher education have similarity because it is difficult to repair the damage or indemnify a customer once he has been cheated or hurt by the businesses. This is the direction regulation should adopt in this market for preventing higher education from becoming the next bubble. We need to be paranoid about transparency ,impose stricter accreditation norms and provide authentic education to the consumer to help them make their decisions , probably some thing like a state run credit rating agency for private and government higher education institutes.
PS: Contributors to discussion - Jayant Kumar, Neeraj Trikha.
Good times carry their own risks. It is very difficult to distinguish between clarity and craziness ; publicity and exaggeration in a booming,competitive market. The first two decades of 21st century in India, when looked back at by historians , will show a conspicuous policy thrust at both Union and state level towards education infrastructure expansion - perhaps driven by demographic necessity since nothing essentially happens in a democracy when it is not desired by people. It may be a bit premature to predict the fate of this expansion , but there are signs that the private universities' entry in education sector might swell up into a mega bubble.
You might have perhaps by now come to realize that you'd find none of those cute looking girls who pose as students of these universities in their full page ads in national dailies. But then a bigger farce is played over the promised USPs printed in text. The terms of reference remain vague , unsubstantiated or even fake. As a UGC led probe found out in case of 44 such private universities in India , "virtual library " being promised by one of them was nothing but a computer center with internet , similarly there are others who exploit public ignorance to boast of exchange programmes with foreign universities that may actually be open to any student irrespective of his enrolment in that university. And then there are some more obfuscatory combinations of adjectives and nouns like "excellent placement" , "latest pedagogical techniques" , "state-of-the-art laboratories " that simply can't be measured objectively . A majority of such universities invariably offer engineering degrees.
NASSCOM came out with a very widely debated survey last year that found 75% of engineering graduates unemployable. Still the ground reality remains that engineers tend to get better and bigger white collar jobs with considerable ease. The employers of most of these apparently unemployable engineers are firms that export IT services and have more than 95% of their operations overseas. Number crunching or code weaving in mechanical fashion is an important attribute of these job profiles . The amazing figures posted as profits by this sector are both a result of depreciated value of rupee in terms of dollar that gives more rupee profit returns for every dollar earned and tax holidays provided by the state. Some time in this decade, both these factors are going to stop working in our favour and IT services will return to more balanced growth comparable with other sectors in the economy. Then , the training costs of ill-trained half-baked pass outs will begin to pinch. We can't risk unemployment on such a massive scale when half of the country's population will be under 35.
The reason unfair business practices and unscrupulous education sector entrepreneurs thrive is because of the strongly seductive charm of engineering not as a degree but as an investment. An admission into any engineering institute even at a cost of Rs. 7-10 lakh for four years guarantees a return (job) of 3-4 lakh rupees just on maturity (passing out).So as long as there are enough fathers who have children with mediocre aptitude for academics but enough appetite to take this risk, there will be no dearth of entrepreneurs raising money by selling off their idle property to set up private mom-and-pop universities.
Negation of an existing policy often seems to be the most definitive but undoubtedly the most fatal way to deal with an impending crisis. Reverting back to the days when higher education was primarily state-run , ostensibly to protect national interests from commercial will be denying ourselves the economies to be exploited from a young population.
Higher Education is inevitably moving from being a no profit activity to a business and that is the way it should be. But like all free markets, it should be promoted with adequate legal safeguards for consumers. In that sense, medical services and higher education have similarity because it is difficult to repair the damage or indemnify a customer once he has been cheated or hurt by the businesses. This is the direction regulation should adopt in this market for preventing higher education from becoming the next bubble. We need to be paranoid about transparency ,impose stricter accreditation norms and provide authentic education to the consumer to help them make their decisions , probably some thing like a state run credit rating agency for private and government higher education institutes.
PS: Contributors to discussion - Jayant Kumar, Neeraj Trikha.
Wednesday, January 27, 2010
Flipside
We had been having power cuts for the last three weeks or so. Headaches they were to the campus inmates who prefer to be up until the early hours of the day. That day, a set of distinguished fourth years downed hastily a few more shots of vodka in the anticipation of a dry day barely 300 metres away from the Janmashtami festivities. We, five CELites sat in the ANC, stuffing ourselves with layers of cheese and chicken to kill time.
a: "Dude! did you hear that?It was on the TV that we would be having 9 hours of power cut everyday
b:Really! shit man
c: yeah, 7 to 12 in the morning, 4-6 in the evening, and 10-11 in the night
b:m******s! why don't they do anything be. This is bad, this is worse than a village. what are they doing man?
a; as kaul said, we are going back to the sixties be. the infrastructure is fallin bey!
c: till when is this supposed to continue
d: they have had bad rains , probably till next monsoons
a,b&c: what!! don't tell me that?
c:what happened re?
d:apparently lokis protested against the uninterrupted power supply that we get here whereas they have power cuts and they have had no rains so they need to run borewells
It went pretty high up in the Rajasthan government.
e: You know what, they might even cancel Oasis, because of Swine flu and stuff
b:Crap be! you can't stay at this place somebody take me out
a:f*** government , f*** lokis, they don't understand that they depend on us.Pull out this college and they would be dying on the streets.
c:Dude,they too don't get power
b: So what, we pay industrial rates bey!
c; and these bastards live on subsidies
cheap politics. but then they are serving their constituency. We don't choose Rajasthan government.
a: can't insti do anything? Dude i am so convinced why the rich hate the cribbing poor.They deserve it!
c: do something man. I wish i could set a virus on them and see each one of them die. not know what hit them.Die till they repent. Man , Indians are pussies.They can't sustain a revolution. They never have in history.
a: I feel like raping their women , selling their children to slavery.The ruling class in the olden days was soo right.
c: Come on man, we need to sleep. It's already 3.
That night C slept at 3, woke up at 11. The fan has been whirring unbroken over his head. He was wished Happy Indpendence day by a web philosopher who like him had been a member of CEL and believed in Standing Tall. C , 10 years ago had lived through a blackout that lasted 45 days, he still emphasized this emphatically to his peers when he wanted to highlight his humble origins and his consequent rise against all odds.But then , all adversities are meant to be surmounted and victory over them celebrated , not eliminated for benefit of the society.C and his many friends like A,B,D.... believe in the power of ideas, of informal discussions throwing up solutions.It is just that the rumours of a impending nine hour power cut tear off that veneer and disturb the leisurely equilibrium of ideation.
Replace A.B.C.D with Americans , Japanese , Germans and British and lokis with Indians and you would balk at the double standards of our chatter class. You would even think that privileged class of the wider world is fairer without Indians in its ranks.
If we have the right to better power than lokis just because we pay more, why do we complain of food crisis when there are people in the world who can buy things at much higher prices?Why do we even talk of iniquity?
a: "Dude! did you hear that?It was on the TV that we would be having 9 hours of power cut everyday
b:Really! shit man
c: yeah, 7 to 12 in the morning, 4-6 in the evening, and 10-11 in the night
b:m******s! why don't they do anything be. This is bad, this is worse than a village. what are they doing man?
a; as kaul said, we are going back to the sixties be. the infrastructure is fallin bey!
c: till when is this supposed to continue
d: they have had bad rains , probably till next monsoons
a,b&c: what!! don't tell me that?
c:what happened re?
d:apparently lokis protested against the uninterrupted power supply that we get here whereas they have power cuts and they have had no rains so they need to run borewells
It went pretty high up in the Rajasthan government.
e: You know what, they might even cancel Oasis, because of Swine flu and stuff
b:Crap be! you can't stay at this place somebody take me out
a:f*** government , f*** lokis, they don't understand that they depend on us.Pull out this college and they would be dying on the streets.
c:Dude,they too don't get power
b: So what, we pay industrial rates bey!
c; and these bastards live on subsidies
cheap politics. but then they are serving their constituency. We don't choose Rajasthan government.
a: can't insti do anything? Dude i am so convinced why the rich hate the cribbing poor.They deserve it!
c: do something man. I wish i could set a virus on them and see each one of them die. not know what hit them.Die till they repent. Man , Indians are pussies.They can't sustain a revolution. They never have in history.
a: I feel like raping their women , selling their children to slavery.The ruling class in the olden days was soo right.
c: Come on man, we need to sleep. It's already 3.
That night C slept at 3, woke up at 11. The fan has been whirring unbroken over his head. He was wished Happy Indpendence day by a web philosopher who like him had been a member of CEL and believed in Standing Tall. C , 10 years ago had lived through a blackout that lasted 45 days, he still emphasized this emphatically to his peers when he wanted to highlight his humble origins and his consequent rise against all odds.But then , all adversities are meant to be surmounted and victory over them celebrated , not eliminated for benefit of the society.C and his many friends like A,B,D.... believe in the power of ideas, of informal discussions throwing up solutions.It is just that the rumours of a impending nine hour power cut tear off that veneer and disturb the leisurely equilibrium of ideation.
Replace A.B.C.D with Americans , Japanese , Germans and British and lokis with Indians and you would balk at the double standards of our chatter class. You would even think that privileged class of the wider world is fairer without Indians in its ranks.
If we have the right to better power than lokis just because we pay more, why do we complain of food crisis when there are people in the world who can buy things at much higher prices?Why do we even talk of iniquity?
Friday, January 15, 2010
In Examinations we trust.
Less than two months from now, a cousin of mine will sit for his first public examination with many other 16 year olds like himself .He hates it,and obviously I would be so regressive to agree with his parents to force down his throat a career perspective that seems so much of a 90s thing if you believe the new wave generalists and non-conformists that I have a chance of meeting everyday in this god-forsaken place.
We love quantify things when we cannot vouch for their credibility . We love clarity. These three hour tests will give you a number , an inalienable identity that lives with you on your certificates. Is this fair? No.
I know you hate the Haber's process for making ammonia that they teach you in your secondary school and if you still don't do it you will begin to hate the equations of tangent to a parabola that they teach you in class 12th and if you manage to bear them all, you will begin to despise the functions and pointers they will begin to teach you when once you end up in some faceless engineering college. The point is you will continue to hate examinations if you stick to the idea that they were meant to be instruments to quantify the amount of education drilled into you. Well, examinations in India are not about the business of education, they are about the business of democracy.
Long long time ago, there used to be a British guy called Charles John Canning. Perhaps you know him as the evil governor who suppressed the Sepoy Mutiny of 1857. What few people know that he unwittingly created a system through the Indian Councils act of 1861 that has outlived even the Raj.He started the first clerical examinations for Indians in the British Civil Services. In the last 149 years we have diversified and introduced Viceroy Canning's legacy to every sphere of professional qualification . The first Indian nationalists were civil servants- the product of this system and early indicators of the powerful tool for democratization public examinations would become.
The dilemma for an examination's necessity was put forward so lucidly by a friend Nikhil here : "An examination is so structured , a very fair game if you are in the mode. Like say, I want to get into design. Then there isn't a career path as organized for me as it would , say if I were interested in Management. In that case, I would have just joined a coaching center and cracked CAT- a method to evaluate you fair and square."
Haven't you noticed that the Hindi movies that talk about following your heart and living by your convictions are themselves starred in by children of celebrity parents ? All our young politicians that somehow seem so promising today are not the products of a social revolution but gradual dynastic entrenchment and evolution.
Examinations , my dear, are meant not for people who want to imitate their parents or step into their shoes but for those who want to surpass them. One of these days, when you receive your admit card for your 10th board examinations, remember that what you have in your hands is something more powerful today in India than the voter ID card that they will issue to you on turning eighteen. Behind the anonymity of a roll number as you write you exams, your pen will have as much power as that of the most privileged children who appear beside you.
Equality of opportunity is not a frivolous goal - the makers of our Constitution could not guarantee it despite penning down 395 articles in terse text. Examinations may probably accomplish it. In examinations we trust.
We love quantify things when we cannot vouch for their credibility . We love clarity. These three hour tests will give you a number , an inalienable identity that lives with you on your certificates. Is this fair? No.
I know you hate the Haber's process for making ammonia that they teach you in your secondary school and if you still don't do it you will begin to hate the equations of tangent to a parabola that they teach you in class 12th and if you manage to bear them all, you will begin to despise the functions and pointers they will begin to teach you when once you end up in some faceless engineering college. The point is you will continue to hate examinations if you stick to the idea that they were meant to be instruments to quantify the amount of education drilled into you. Well, examinations in India are not about the business of education, they are about the business of democracy.
Long long time ago, there used to be a British guy called Charles John Canning. Perhaps you know him as the evil governor who suppressed the Sepoy Mutiny of 1857. What few people know that he unwittingly created a system through the Indian Councils act of 1861 that has outlived even the Raj.He started the first clerical examinations for Indians in the British Civil Services. In the last 149 years we have diversified and introduced Viceroy Canning's legacy to every sphere of professional qualification . The first Indian nationalists were civil servants- the product of this system and early indicators of the powerful tool for democratization public examinations would become.
The dilemma for an examination's necessity was put forward so lucidly by a friend Nikhil here : "An examination is so structured , a very fair game if you are in the mode. Like say, I want to get into design. Then there isn't a career path as organized for me as it would , say if I were interested in Management. In that case, I would have just joined a coaching center and cracked CAT- a method to evaluate you fair and square."
Haven't you noticed that the Hindi movies that talk about following your heart and living by your convictions are themselves starred in by children of celebrity parents ? All our young politicians that somehow seem so promising today are not the products of a social revolution but gradual dynastic entrenchment and evolution.
Examinations , my dear, are meant not for people who want to imitate their parents or step into their shoes but for those who want to surpass them. One of these days, when you receive your admit card for your 10th board examinations, remember that what you have in your hands is something more powerful today in India than the voter ID card that they will issue to you on turning eighteen. Behind the anonymity of a roll number as you write you exams, your pen will have as much power as that of the most privileged children who appear beside you.
Equality of opportunity is not a frivolous goal - the makers of our Constitution could not guarantee it despite penning down 395 articles in terse text. Examinations may probably accomplish it. In examinations we trust.
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