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BUSINESS, GOVERNMENT &

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On 1 August 2009
Handout Summary Business, Government and Society

Contents
Contents................................................................................................................ 2
Introduction........................................................................................................... 4
Contributors........................................................................................................... 4
From Midnight to the Millennium and Beyond: Democracy and Identity in Today’s
India....................................................................................................................... 4
Ideas of India”, “Rights..........................................................................................9
Political Parties in India........................................................................................15
India’s Informal Economy: Facing the Twenty-First Century...............................20
India’s New Entrepreneurial Classes: The High Growth Economy and Why it is
Sustainable.......................................................................................................... 24
Introduction......................................................................................................... 28
Banias and Beyond: The Dynamics of Caste and Big Business in Modern India...32
Traditional Female Moral Exemplars in India......................................................35
Pangs of Change..................................................................................................37
Democracy and Secularism in India.....................................................................39
Affirmation without Reservation..........................................................................41
Redesigning Affirmative Action............................................................................44
Women and the Labyrinth of Leadership.............................................................47
Feminization of Poverty in Post - Apartheid South Africa.....................................51
Thirty Years On: Women's Studies Reflects on the Women's Movement.............53
Explaining Sixty Years of India’s Foreign Policy...................................................56
Indian Foreign and Security Policy: Beyond Nuclear Weapons............................58
Developing India's Foreign Policy 'Software'........................................................61
The Clash of Civilizations.....................................................................................65
It’s a Flat World After All......................................................................................67
Corporations: Predatory or Beneficial?.................................................................69
Serviced From India : The Making of India's Global Youth ..................................78
Labour and Globalization.....................................................................................79
Imaginary Cities...................................................................................................83
Bangalore: Urban Lessons...................................................................................84
The Rise of the Creative Class............................................................................85
Asian Development Bank: Managing Asia’s Cities...............................................87
Everybody Loves a Good Drought........................................................................93
Political Economy of Agrarian distress.................................................................94
Modernising Agriculture.......................................................................................96

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Knowledge@Wharton interview with M. Yunus, Founder of the Grameen Bank.


.......................................................................................................................... 100
Serving the World’s Poor, Profitably..................................................................101
The Indian Innovation System............................................................................103
Innovation: A Guide to the Literature.................................................................103
The Cathedral and the Bazaar...........................................................................103
India & the Knowledge Economy: Opportunities & Challenges..........................109
Who Owns the Knowledge Economy..................................................................113

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Introduction
This document is a compilation of the BGS Summaries painstakingly put together
by a handful of students of the PGP 2009-2011 Section E. Hope this is
enlightening to one and all.

Contributors

From Midnight to the Millennium and Beyond:


Democracy and Identity in Today’s India
Shashi Tharoor

Summary by Saurabh Verma and Potala Sai Babu

Pluralism: A social organization in which diversity of racial or religious or ethnic


or cultural groups is tolerated.

[This is one keyword that appears over and over again in this interesting written
speech, which I’m sure all of us must read for the sheer insight it offers into our
country, and its strengths that we often tend to overlook. This is why I have
extensively quoted him verbatim in this summary.]

Shashi Tharoor starts by comparing his role as a UN diplomat with that as an


Indian citizen. He says that “…both emerge from the same pluralistic
convictions. Indian adventure is that of human beings of different ethnicities and
religions, customs and costumes, cuisines and colours, language and accents,
working together under the same roof, sharing the same dreams. That is also
what the UN, at its best, seeks to achieve.”

He says that generalisations are too hard to make for a country such as India,
such that whenever you say anything about India, the opposite is also true.
Pluralism is also acknowledged in the way that
“at a time when most developing countries opted for authoritarian models of gov
ernment to promote nation‐building and to direct development, India chose to be
a multi‐party democracy”.

“Pluralism is a reality that emerges from the very nature of the country; it is a ch
oice made inevitable by Indiaʹs geography and reaffirmed by its history.”

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He mentions the 4 most important questions facing all countries at the beginning
of the 21st century:

• The bread versus freedom debate: can democracy work in a country


of poverty and scarcity, or do its inbuilt inefficiencies impede growth?

• Centralization versus federalism debate: does tomorrow’s India need


a strong Govt. that transcends fissiparous tendencies, or one that
centralized very little?

• The pluralism versus fundamentalism debate: should India find


refuge in assertion of its own religious identity?

• The ʺCoca‐Colonizationʺ debate: or globalization versus self‐reliance.

He then takes up the debate on India’s identity and democracy. He talks of H.D.
Deve Gowda who as the PM of India makes his Independence Day speech in
Hindi, reading it from a paper written in Kannada script. He says such an episode
is possible only in India, where the PM – for that matter, half the population –
doesn’t understand the national language.

He says we all are minorities in India, because our native language, origin,
religion, caste, gender, all divide each one of us into a very small bracket of
people, none of which is a majority. Ethnicity further complicates the matter,
bringing in dress, appearance, customs, tastes, language, political objectives etc.
He also says that nationalism is rare to find in India, since it cannot be based on
geography, ethnicity or religion, all of which are available in diverse forms.

“Indian nationalism is the nationalism of an idea, the idea of an ever‐ever land—


emerging from an
ancient civilization, united by a shared history, sustained by pluralist democracy.

So the idea of India is of one land embracing many, a democracy where


“you donʹt really need to agree—
except on the ground rules of how you will disagree”, i.e. “a consensus on how to
manage without a consensus”.

He then moves on to criticise the Hindu Rashtra view of some of our countrymen
by reminding us of the concept of “unity in diversity”. “Westerns dictionaries
define ‘secularism’ as the absence of religion, but Indian secularism meant a
profusion of religions, none of which was privileged by the state. Secularism
meant, in the Indian context, multi-religiousness.”

He says that India’s secular status was made possible by the fact that a majority
are Hindus, which is itself “…a religion without fundamentals: no organized
church, no compulsory beliefs or rites of worship, no sacred book”. He says “that
the Hindu idea that religion is an intensely personal matter,
that prayer is between you and whatever image of your maker you choose to wo
rship.”

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He laments that the politics of deprivation has eroded the culture’s confidence,
and Hindu chauvinism has emerged from competitions fro limited resources.
“The suggestion that only a Hindu, and only a certain kind of Hindu, can be an au
thentic Indian, is an affront to the very premise of Indian nationalism.”

He further urges us to celebrate diversity, and says that “if America is a melting‐
pot, then to me India is a thali, a selection of sumptuous dishes in different bowls
. Each tastes different, and does not necessarily mix with the next, but they belo
ng together on the same plate, and they complement each other in making the
meal a satisfying repast”.

After all, India is too diverse a nation to be confined to only one view, and
democracy is the only way of doing justice to all these diverse sections. One
encouraging observation is that in India, the democracy is embraced by the poor
who turn up in huge numbers to vote, whereas in countries such as US, it’s the
rich that participate more often in democratic processes. This has given
immense power to the lowest of India’s low. He talks of Dalit leaders like
Mayawati and K. R. Narayanan.

He talks of the extraordinary degree of change in India, which takes place in


politics, economics and caste-relations. All three of these add up to a revolution
of sorts,
“… a democratic revolution, sustained by a larger idea of India, an India which sa
feguards the common space available to each identity, an India that remains saf
e for diversity”.

Then he touches upon economics of nationalism, which put political


independence and economic self-sufficiency in the same bracket, but actually led
to a distribution of poverty, and regulation of stagnation. He advocates that India
open the floodgates of globalization, and harp on its own “ability to absorb
foreign influences and transform them into something that belongs naturally on
the soil of India”. He expresses optimism that India will, as it has always been, be
open to the contention of ideas and interests within it, unafraid of the influence
of the outside world.

He sums it all up by summarizing his vision for the India of the future:

“ If the overwhelming majority of a people share the political will for unity, if they
wear the dust of a shared history on their foreheads and the mud of an uncertain
future on their feet, and if they realize they are better off in Kozhikode or Kanpur
dreaming the same dreams as those in Kohlapur or Kohima, a nation exists, cele
brating diversity, pluralism—and freedom.”

There are few questions in this period to Shashi Tharoor which are being
transcribed as follows

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Question 1: Is India should move toward a common civil code?

Answer by Shashi Tharoor: After the partition of India, Nehru decided to let the
minorities feel a sense of self-assurance that would come from having no
interference with their civil codes. There has been diversity in the civil code
which has been followed by Hindus and Muslims. Hindus followed the common
civil code across the country, despite regional variations in practice but Muslims
were allowed to retain personal law. I don’t think that we’re going to move
rapidly toward a uniform civil code, and that’s simply because the politics of this
– the politics of diversity.

Question 2: To what extent the Muslim “awakening” particularly coming from


across the border, is affecting India and does it have a connection to the rise of
Hindu sentiment?

Answer: I think, yes, chauvinisms tend to feed on one another and so there is no
question in my mind that the assertion of a particular identity be one group. Look
at the rest of our country, “they say “A Muslim says,’ I am proud to be Muslim,’ a
Christian says, “I am proud to be Christian,’ and a Hindu says, ‘ I am proud to
be..secular’.” Hindu can afford to say that, because there is to that degree safety
in numbers. It is identity asserted at its pettiest level, and not at the kind of level
that makes any meaningful religious sense.

Follow up question: Where are young going?

Answer: Young are going both ways. There are lots of young people who are,
slogan-shouting assertions of pride and there are some who are simply too busy
seeking jobs at call centers to worry about one thing or other and there are some
who would go out in the street to defend the sorts of ideas.

Question 3 from Jitendra Singh, Professor at Wharton School of Business: What it


means to you to be a novelist as I have to say that I enjoyed your novels over the
years?

Answer: I started writing fiction at age six. It is what I do; I have to do it; if I
don’t, it will be extremely painful for me. I started reading the books on my
parents’ shelves as I couldn’t figure out time to spend as I don’t have brothers
and sisters. I started writing the stories. I was blessed with a father who actually
encouraged this, and got it published. I became a bit of a recidivist. I wrote
throughout my school days. I wrote and published short stories in English in
pretty much every Indian magazine that existed in my student days, and kept
writing. I was the only author in U.N which was permitted to write as long as I
don’t violate the staff rules. I had to take considerable amount of time span of
five years between my books because in fiction we require considerable amount
of time. I still write outside the office nothing but at home, I do write a column in
the Indian newspaper “The Hindu”.

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Question 4: How does the idea of India has changed?

Reply : I’ll be very honest, the generation of my parents, by enlarge, had a


totally different attitude from my generation, or people slightly older or slightly
younger, who are now imparting values to their children. My father never told
me about my caste upto the age of twelve where I had to ask to submit the
details to my school. I had friends of all religious faiths, I was never encouraged
to think of them by their religion. I feel the minority community is the rich people
in India. We are always getting sanctimonious politicians making speeches on
national integration. It was constantly exhorted, impressed upon us. This is a
degradation of public discourse.

Question 5: How is the future of India getting shaped?

Reply: I believe in the prospect of India doing extremely well; economically, as


you know, we’re already in purchasing power parity terms the fourth-largest
economy in the world. There are some tangible improvements to peoples’ lives,
everything from the construction of roads to the job opportunities arising from
increasing globalization and liberalization. But we do have to do things right,
and that the fact is that we are consistently taking two steps forward and one
step back.

Question 6: How is the violence which erupted in Gujarat 2002 is different of the
Babri mosque demolition in 1992?

Reply: Riot, be stopped, both by administrative and police action. What has
been planned in Gujarat has been deliberately planned and executed, and
condoned by those whose job it was to stop it and elsewhere in India these plans
didn’t exist. If governments do their jobs properly and uphold the mechanisms of
law and order, anything of that nature can be prevented.

Question 7: What’s your opinion on current talks between India and Pakistan?

Reply: As an U.N official I keep my distance from official matters involving my


country. But it appears that it has been conducted in bonhomous atmosphere.
There is at least an important change in the atmospherics.

Question 8: Question on Indian Diaspora, the stresses they are feeling, higher
incidences of depression among Indian-American teenagers than amongst other
ethnic groups

Reply: The first, and perhaps most obvious, is that a majority of the kids to fulfil
the expectations of parents and many Indian kids are excelling in their studies.
The second kind is in deep those who don’t want to conform or feel the pressure
and who in fact feel the discordance between family pressure and the world
outside. I m sure that the experiences is different for those Indian-American kids
growing up in place where there are large concentrations of people from the
subcontinent. Certainly the identity from where we came affects the choice we

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make. It may be more a difference of what it is that they feel of association with
the identity.

Ideas of India”, “Rights


Ramachandra Guha

Summary by Alok Jain

Executive Summary 

The article goes into detailed discussion of emergence of Caste based politics
and the conflicts that were rooted in castes in various parts of the nation. In the
first half of the article Guha details various events that helped in making caste
based politics the prime face of Indian democracy, in the second half he talks
about the conflicts and insurgency in various parts of the country in which in one
form or another started as organized resistance by certain castes.

Even though with economic and social changes post independence, we saw the
weakening of the association between caste and occupation, and acceptance of
inter dining and inter caste marriages, caste continued to play a striking role in
society and politics. Most Indians were defined by the endogamous group into
which they were born.

The article is not an opinionated one; it is more or less factual and details
following events -

Following are some major events in evolution of Caste based politics

• Reservations for ST/SC

• Emergence of OBC in the Indian politics in the 1960s and 1970s

o Mandal Commissions

o V.P. Singh implements Mandal commission’s recommendations of


27% reservation to OBCs

• Emergence of Bahujan Samaj Party

o Strong leaders such as Kashinram and then emergence of Mayawati

o Success of BSP had an influence on other parties to do active caste


based politics

Following are the major conflicts that have happened in various parts of country

• Naxal movements

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• Conflicts in Kashmir

• Violence in the North East states

Summary:

Emergence of OBC in the Indian politics in the 1960s and 1970s: These
acted as a vote bank, lining up solidly behind a politician of their caste. It was
these OBCs that formed the social base and provided the leadership of the
parties that successfully challenged the dominance of Congress. Examples: DMK
in madras, Lok Dal, the Socialist party etc. Economic power had come to OBCs
through land reforms and green revolution; political power through ballot box;
what lacked was administrative power.

• Janta Party govt. appointed the Mandal Commission which defined on the
basis of state surveys 3743 specific castes which were still backward.
These were represented very poorly in the administration and thus Mandal
Commission recommended a 27% reservation for them in all posts in
central government to give them an immediate feeling of participation in
the governance of the country.

• By the time Mandal commission submitted its report, Janta govt. had
fallen.

• Congress regime followed headed by Mrs. Gandhi and Rahul Gandhi gave
it a quiet burial

• 1989 – National Front Govt. - Mr.V.P.Singh- sensible of the rising political


power of the OBCs- implemented Mandal’s report as a corrective to
dominance of upper castes in the public services.

• 1990- case in SC contesting the constitutional validity of Mandal


Commission’s recommendations:

o Extension of reservation violated the constitutional guarantee of


equality of opportunity

o Caste not a reliable indicator of backwardness

o Efficiency of public systems at risk

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• September 1990 – DU student Rajeev Goswami set himself on fire in


protest against the Mandal’s report. Many more self immolators. Around
200 suicide attempts. 62 successful!

• Stronger resent in North as compared to south. Why?

o Affirmative action programs had long been in existence in south

o South – thriving industrial sector- less dependence on govt. sector

o Upper castes less than 10% of population. In north, 20% of


population

• Strongest supporters of Mandal Commission were two rising politicians –


Mulayam Singh Yadav(UP) and Lalu Yadav(Bihar) 1991- Congress back to
power- to gain strength in North and woo the backward castes- Narsimha
Rao- endorse Mandal report- 27% reservation to OBCs with preference to
poor amongst them

• 1992- SC dismissed the petition filed in 1990 against Mandal Report. But 2
additional things: reservations should not exceed 50% of the jobs in govt.
and caste criteria only in recruitment and not in promotions.

• Initially in 1980s CPI and CPM opposed Mandal coz believed that class and
not caste is the major axis of political mobilization. BJP opposed coz
accorded pride of place to Hindu religion. But finally in 1990s, all parties
saw the political costs of opposing it and thus accepted it.

Emergence of Bahujan Samaj Party:

• 1956: Dr. Ambedkar, died

• Then most prominent Untouchable leader- Jagjivan Ram- Congress. Died in


1988. Now active, Kanshi Ram

• 1971 – Kanshi Ram had formed All India backward and Minority
Communities Employees Federation (BAMCEF), an organization to
represent govt. employees from a disadvantaged background, a trade
union of SC elite. By 1980s had membership of 200000. Mainly in North,
particularly UP

• 1984 elections- Kanshi ram started BSP (Dalit = SC; Bahujan =


SC+OBC+Muslim). Garnered more than a million votes but not any seat.

• In subsequent elections, better performance

• Best in UP, at the expense of Congress- BSP stood for “social justice” and
“social transformation”. Had emerged as one of the three major political
groups in the state, the others being Mulayam’s Samajwadi party and BJP.

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• By 1990s, Kanshi Ram supplanted by Mayawati who realized that the


Dalits could never come to power on their own and thus built cross party
and cross caste alliances. Became thrice the CM, heading coalition govt.
formed with SP or BJP.

• Increased visibility of SCs, now knew of their rights under the Constitution
and were fighting for them.

Clashes between upper castes and Dalits:

Following the increase in power of Dalits, there were numerous violent clashes
between the upper caste Hindus and OBCs against Dalits. The clashes were seen
more severe in the southernmost districts of the Tamil Nadu and in Bihar.

Growing power of Naxalites:

Bihar – max oppression of Dalits historically; grossest forms of feudalism; land


reforms in West Bengal but not in Bihar. Middle and upper class owned the land
and Dalits tilled it.

1970s- Maoist radicals took up the case of Dalits. Naxalites disappeared from
West Bengal where they were prominent a decade ago and now gathered
strength in the districts of Central Bihar. Formed agricultural labour fronts and
demanded higher wages, equality, end to forced labour, share to village common
land and an end to social coercion. New found self respect in Dalits - most
significant achievement of Naxalites. Other achievements

• End to forced labour

• Equal rights to women laborers

• No forced labor

• Better working conditions etc

However long-term aim of these radicals – to overthrow Indian state. Hidden,


illegal activities carried on side by side, collection of weapons. Naxalites had
their own army called Lal Sena and Safaya squads who were trained to
assassinate oppressive landlords.

In response, the upper caste and ruling elite formed senas and private armies of
their own. Infinite violent incidents between these and Naxalites. By mid 1990s-
in much of Bihar, state had no visible presence at all.

Scheduled Tribes:

Naxalites active also amongst STs. STs also called Adivasis lived in the most
resource rich areas of India. Over the years losing resources to state or
outsiders.

Activists among tribals- Marxists and Gandhinians. Csuses of tribals:

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• Access to forests and tribals. Particularly angry with the forest department
which restricted their access to wood and non forest products.

• Were paid niggardly sum for like tendu leaves collection used for making
bidis.

• Provisions of decent schools and hospitals

1990s- Narmada Bachao Aandolan- Medha Patkar- against displacement of


around 200000 tribals due to construction of dam on Narmada river.

1998- Three new states- Chattisgarh, Jharkhand and Uttaranchal

Conflicts in Kashmir:

1989: violent again!

November 1989: V.P.Singh replaced Rajeev Gandhi as PM. Appointed Kashmiri


politician Mufti Mohammed Sayeed to Union Home Minister to please Muslims of
India.

December 1989: Rubaiya Sayeed, daughter of the home minister kidnapped in


Srinagar by JKLF(J&K Liberation Front). 5 jailed ministers released by the Indian
Govt. to free her. Major victory for militants.

32 separatist groups in the valley, including JKLF(independent non


denominational state of J&K in which Hindus and Sikhs would have same rights
as Muslims) and Hizb-ul Mujahideen(Islamic regime nad not averse to merger
with Pakistan)

Govt. finally moved a lot of armed forces (80000) to the state.

Who was caught in the cross fire? The innocent inhabitants of the valley. Cases
of tortures by CRPF, violent killings etc reported on large scale.

Violence in the North East states:

1990s- Assam- good news- accord reached with the Bodos, allowing for an
autonomous council to be formed in those districts where that community was in
a majority.

Assam- secessionist ULFA (United Liberation Front of Assam)- tea plantations


paid an annual sum to these rebels, mounted raids on banks, and mass violence.

Tripura- 2000 killings between 1993 and 2000- mostly civilians.

Manipur- had once been an independent kingdom. Chiefly ethnic rivalries and
also all ethnic groups saw themselves as non-Indians (banned screening of
Indian films) and wanted an independent state

Nagaland- NSCN (National Socialist Council of Nagaland) - stubbornly committed


to the idea of an independent and sovereign Nagaland. NSCN had well trained

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fighters and operated from Burma making raids across the border and engaging
the army. Even govt. officials paid a monthly “tax” to the underground!

1997- church groups and civil bodies forced the rebels and govt. to declare a
ceasefire. Talks on but no agreement reached. The Indian govt. agrees to give
Nagas the fullest possible autonomy but within the terms of Indian constitution.
But Nagas want creation of a new greater state- Nagalism- consisting also of
parts of Assam, Manipur and Arunachal Pradesh, where Nagas live. This of course
is violently opposed by these states. Also want greater sovereignty and retention
of a separate Naga army.

North east- region of violence and migration- immigration from Bangladesh.

Also a massive military presence –

• External security since borders China, Bangladesh and Burma.

• to maintain the flow of essential goods and services

• to protect rail roads

• to suppress rebellion and insurgency

Army operates under the Armed Forces Special Powers Act(APSPA)- special extra
powers to army- misused by the army. Human rights groups have asked for the
repeal of APSPA

Condition of Women in Indian Society:

Gender discrimination very high. Boys given more freedom and education and
rights as compared to their sisters.

Sex ratio consistently declining from 972 females to 1000 males in 1901 to 927
in 1991

1980s- sex determination techniques made things worse

Situation more grave in Punjab and Haryana

Variations in gender relations were spatial as well as cultural. In south, the


condition of women was not that worse. Also things were better in cities where
there was an upsurgence of feminist movement. Changes in law. Amendment of
Hindu Succession Act,1956- for the first time bought agricultural land in its
purview, allowing women the same inheritance rights as men.

Situations getting better in Mizoram in the 1990s:

Return of peace in Mizoram. Leaders of Mizoram National Front(MNF) had made a


spectacular transition, from being insurgents in jungle to politicians in
Secretariat, put there by ballot box. Construction of water pipelines, roads and
schools. Mizoram soon replaced Kerala as the most literate state. Were learning
Hindi and since were very fluent in English, gradually grabbing positions in the

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service sector. Targeted to make the state “Switzerland of East India”, to


encourage tourism and a smoother trade with the neighbouring countries. The
CM also carried out a larger role in bringing about a settlement between the
government of India and the Naga nd Assamese tribals.

Situations getting better in Punjab in the 1990s:

1987- president’s rule and repeatedly extended by 6 months. Chaos and gun
battles killing as many as 20000 lives between 1981 and 1993, with 11000 of
them as civilians.

1990- army called for help, withdrawn in 1991

1992- elections to state assembly. The Akali Dal boycotted the elections and the
elected congress minister killed by a suicide bomber!

1993- Akalis returned to democratic politics. 1997- won emphatic victory in the
assembly polls. Militancy was on wane. Sikhs saw themselves as part of India.
Industrial sector in the state flourishing. This alienated community had regained
its self esteem and resumed its leading role in nation building. Sikhs commanded
some of the most important jobsd in nation was widely hailed as a sign of
Punjab’s successful reconciliation with India.

Political Parties in India


Rajeev Gowda and E Sridharan

Summary by Ashis Nayak

This summary introduces roles of political parties and the party system in
deepening Indian democracy specifically on their role in evolution in
institutionalized mechanism of power sharing and the promotion of inclusive
resilient state. India adopted written constitution in 1950, which features
fundamental rights and freedoms, and universal adult franchise. India is
organized into twenty-eight states and seven union territories.

India’s politicized social cleavages are of religion, Language, caste, tribe rural v/s
urban residents and class. Hindu’s are internally divided by language, caste and
sects. The broad caste clusters are Upper caste, intermediate castes and two
constitutionally recognized grouping SC’s and ST’s. Other numerically significant
religious communities are Muslims (13.4%), Christians (2.3%), Sikhs (1.9%),
Buddhist and Jain.

Theories of party system evolution

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Democracy’s success depends on vibrant competition among political parties.


Political parties evolve within party systems. There are two theories for political
parties evolution first “The social-cleavage theory” and second “The
electoral-rules theory”. The social cleavage theory postulates party systems
are a reflection of the principle cleavages in a given society. ( e.g. Cleavage
between capital and labor). The electoral rules theory postulates that the rules of
political system and of electoral system, create incentives for political forces to
coalesce or to splinter. The principle causal features are the size of electoral
districts, the structure of ballot and the decision rule or electoral formula.

Several theories are tabulated in the following table

Author Theory

Maurice Argues that combination of mechanical and psychological


Duverger effects tends to produce a two party system
Evolutions
Pradeep Argues that division of power between level of
chhibber Of government- national, state of provincial and local -affects
and ken political the formation of parties at different levels
kollman parties
e.g. more centralized power over decisions with state
affects the citizens but more incentives for political
entrepreneurs to form nationwide political parties and for
voters to vote for them

Arend India’s political system has institutionalized grand coalition


Likphart governments and has included all religious and linguist groups; allowed
cultural autonomy, provided proportionality in political representation
as well granted minority veto on minority vital issues.

Atul kohli Supports power sharing in Indian politics

Rudalph Indian politics is persistently centrists because of the marginality of


class politics; fragmentation of the confessional majority; cultural
diversity and social pluralism and the single member plurality system.

Linz, Argues that nation is forged by state institution; policies that respect
Stepan and protect multiple and complementary identities and that is not
and yadav limited to ethno linguistic federalism. It allows power sharing but does
not privilege to any one identity.

Kanchan Argues that Indian political economy is conducive to the ethnification


Chandra of parties. India is patronage democracy where most modern sector
jobs and services are in the public sector; public officials have
discretion in the allocation of public jobs and services

Chandra If ethnic categories are “constructed “ ones as are India’s SC, ST and
OBC. The danger of permanent majorities and minorities can be
sidestepped and the ethnification of parties can be redistributive and
conductive to power sharing in its operation without being

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exclusionary. This causes intra-group competition.

Ashutosh Argues that pressure from below (i.e. poor people) has ensured that
varshney parties promote interventions that mitigate poverty. Such policies are
politically rewarding but economically inefficient.

Paul Brass Critiques is that the consociational argument asserting that political
accommodation in democratic societies is an art not a system and
consociationalism is device for freezing existing divisions and conflicts.
Eventually fragmentation of India’s political system and the emergence
of cleavage-based parties do point to the difficulties of practicing the
art of political accommodation over time

Party system fragmentation


Indian national congress hegemony, 1952-67

Congress won in first four Lok Sabha elections based on plurality of votes
competing against fragmented oppositions, which varied from state to states.

The multiple bipolarizations of state party systems, 1967-89

In the year 1967, congress strength started declining at the national and state
levels. It lost powers in eight out of then sixteen states. Politically mobilized
cleavages emerged, including language based parties such as DMK. Intrastate
alliances of non-congress parties the Samyukta Vidhayak Dals emerged and
pooled votes to oust congress. However, due to lack of coherence in the alliances
resulted in instability and collapse of these parties.

In 1971, the congress won with 2/3 majority in the Loksabha. In response to
congress dominance, anti-congress alliances slowly emerged at the state level.
This raised Index of Opposition Unity against Congress. During 1975-77
emergency, congressed faced temporarily united opposition in the form of Janata
Party. Congress lost elections to Janata Party in 1977 but J P did not compete
against fragmented opposition. Here Durverger’s law held at national level with
two party democracy.

In 1980, janata party disintegrated and congress won the elections. But in 1989,
an opposition alliance emerged supported by BJP and other left wing parties, the
congress share of the votes dropped to 39% and seats too. The National Front
coalition of 1989-90 was novel in three senses. First learning from janata party
experiences and built common manifesto. Second, it brought in reginal parties
like DMK. Third, coalition was the first spatially compatible interstate alliance of
parties. However, this coalition had not moderated or set aside ideological
extremes.

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National Party-system fragmentation and the emergence of coalition


and minority governments, (1989-2006)

1989 general elections signified a seismic shift in India’s party system with BJP’s
rise to prominence and Congress’ relative decline. From no more than 35 seats
and 10% vote nationally till 1989 (except for the historic 1977 election) to
becoming the single largest party in 1996, it has been a phenomenal rise. Riding
on its “hindutva” agenda and cashing on the upper-caste backlash on Mangal
commission’s report of government job reservations for OBC, BJP won 161 seats
in 1996 and came to power. But it could stand no more than 13 days. It was
perceived as a significant ideological statement on the part of a range of secular
parties. BJP however learnt a lesson and in further elections sought a wide range
of alliances in its nonstronghold states and shelved the religiously divisive points
on its agenda.

Since 1990s, alliances have more or less been based on spatial compatibility, at
the expense of ideological compatibility. The two BJP-led coalitions (‘98-‘99 &
‘99-’04) were based on both spatial compatibility (between BJP & regional
parties) & ideological compromise (the BJP set aside its hindu-nationalist agenda
and other parties ignored its communal character).The congress-led coalition
UPA gained power in 2004. UPA was based on a variety of intrastate spatial
compatibility as well as ideological commonalities (anti-BJP) and ideological
compromises (on economic policy between congress and left). Same was the
case of United Front coalition in 1996. Since the 1960s, however, alliances have
been driven by the desire to aggregate votes and not by ideology, programs or
social cleavages.

A process of bipolar consolidation at the state level was the key feature of and
driving force behind the fragmentation of the national party system: Multiple
bipolarities (viz. congress-BJP, cong-left, cong-regional parties) in state party
system empowered a large number of parties at the national level where they
wielded great power. This also indirectly led to bipolar consolidation of BJP and
Congress led coalitions at the center.

The social cleavage theory explains the formation of parties based on religion &
caste. At the same time, as congress centralized many leaders who were feeling
marginalized in congress left and formed new rival parties. (eg: in AP, TN &
Assam)

The Duvergerian multiple-bipolarization explanation along with the Chhibber-


Kollman explanation based on state powers in a federal system explains the
incentives for single-state-base party formation, leading to the multiple-
bipolarization of state party systems. This leads to a highly fragmented national
party system with very large and ideologically disparate coalitions.

The authors don’t really affirm to the point that it is leading to a sustained
bipolarity of 2 alliances but they emphasize here the full representations of

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politically mobilized groups across states, indicating power-sharing among


groups through their participations in diverse coalition rather than in an umbrella
party.

The Decline of Ideology

India has a long history of forming party alliances without a match of ideology.
None of these alliances stick together since no ideological, social or policy held
them together. Initially BJP was untouchable because of its Hindutva agenda, but
then again it was conveniently ignored when the non-congress parties needed to
forge a front. Since 1998, BJP has also somewhat moderated its Hindu-ness in
order to sustain governing alliances.

Apart from Secularism, the other major ideological issue is Liberalization of


the economy. Example: the dispute between UPA and Left in the last
government. But since the liberalization started, it hasn’t been majorly halted.
Arun Shourie says “One reform creates pressure that other reforms be put
through”. This has enabled the NDA too to support the reform during their
power. At the individual levels also, ideological labels have gradually lost their
significance with politicians changing parties without concern for ideological
views.

Overall, this development may merely reflect an ideological consensus: the


acceptance of liberal economic reforms with a “human-face” and a somewhat
diluted secularism.

The rise of Dynastic Politics

The dynasty reign has been present in Indian politics since Gandhi-Nehru time
which just got strengthened with emergence of Indira, Sanjay, Rajiv, Sonia
Gandhi and more recently Rahul Gandhi. Congress has always been somewhat
personalized by these charismatic leaders. Following their steps, now even
leaders like Sharad Pawar, Mayawati have chosen to run highly personalized
parties. According to K.C. Suri, “the charismatic leaders maintain weak party
organizations to prevent challengers from emerging” is the logic behind these
personalized parties.

The benefits of dynastic politics are: 1) the leaders generally won’t face much
of challenge inside the party. 2) The dynasties inherit an already established
network and brand-appeal. They no longer need to build a political base.

Because the dynastic politics stifles the emergence of grassroot leadership,


some scholars blame it for fragmentation of parties, decline in democratic
deliberations and the role of parties being mediating institutions. They advocate
a return to intraparty democracy and transparent, open funding of political
parties.

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The larger consequence of decline in Ideology and rise of dynastic politics is the
reduction of party organizations to mere election-winning machines. (example:
BJP nominating many film stars for 2004 elections)

The impact on the quality of democracy

The fragmentations of party system, nature of coalition politics and internally


top-down character of parties have mixed effects on the quality of India’s
democracy.

Based on Larry Diamond and Leonardo Morlino’s eight dimensions of


democratic quality, the authors feel that on 4 fronts (freedom, participation,
competition & Horizontal accountability) there has been +ve effect. While on rest
4 fronts (Rule of Law, Equality, vertical accountability & responsiveness) there
has been –ve impact.

Competition: The decline of one-party system and emergence of small regional


parties have ensured a strong competition in the state-level elections.

Participation: There has been an increase in participation, especially by the lower


castes and class as well as women and minority groups in the politics.

Horizontal Accountability: The emergence of multiparty system has weakened


the dominance of the governing party on the organs of horizontal accountability
like election commission, courts. The same applies for the media industry also.
These developments have bolstered democratic freedom.

Equality: While on one hand, the emergence of caste based parties have
increased the influence of minorities, at the same time anti-muslim parties like
BJP have threatened the equality for the minorities. This also weakens the rule of
the law. The rule of law also gets weakened by attempts of lower-caste parties to
use state power to further their social base’ interest in a manner
uncompromising to norms and institutions (eg: bihar & UP) Another threat to rule
of law is the greater influence and participation of criminals in politics.

India’s Informal Economy: Facing the Twenty-First


Century
Barbara Harriss-White

Summary by Mayank and Sunil

The main argument in this article is that the larger part of the Indian economy is
regulated in significant ways by social structures that are resistant to change by
means of macro-economic policy. In its regulation of the informal economy, the
Indian state is not proof against the influence of these structuring identities, as a
result of which it does not work as one would expect a modern developmental

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state to work. The implementation of reforms and liberalization is filtered


through these structures.

The Social Regulation of the Indian economy:

In this section, the author examines the ways in which the most significant social
structures of accumulation – religion, caste, space, classes and the state –
regulate India’s informal economy.

Gender:

The informal economy is for the most part a matter of family businesses which
are essentially structures of hierarchical authority between men. As firms grow in
size, the demand for male family labour increases; but as fertility decreases, the
number of male agnates decrease. Yet instead of drawing women family
members into these firms, women tend to be deprived of productive work and
live fairly secluded lives based on the home.

Marriages and alliances are carefully controlled to create and protect the
resources flows crucial to capital accumulation. When a family contracts a good
marriage, its credit increases. Because of these patriarchal arrangements,
competition between firms is frequently suppressed resulting in oligopolies.
Other adverse affect of keeping strong family control over young male property
owners is that they are often educated only to the level compatible with
continuing to live at home or with close kin. The reinforcement of patriarchal
relations in the class controlling local capital also has contradictory effects on the
welfare of women. Relating dowry to the social status of women, the author
argues that s the economic costs of women rise and their economic benefits fall,
so does their relative status. As the gender bias can be explained by low relative
female status arising from lack of earned income, by the costs of dowry, and by
the demand for male family labour in firms, it can be concluded that wealth
creation and property accumulation benefit men disproportionately.

Religious Plurality:

The roles of religions in Indian economy have been very specific. Religious
groups are often found regulating and distributing livelihoods, and providing
insurance and social security. In these ways, forms of noneconomic and divine
authority may be found to govern economic behaviour. eg. The economic
significance of the Jain religion is far greater than the share of Jains in Indian
population. The existing religious plurality in India has meant that the deepening
division of labour and the proliferation of new and technologically upgraded
commodities and services are easily and sometimes exclusively aligned with
religious sub castes and sects. This results in the social patterning of residential
areas and the spatial patterning of economic activity. Religions also owe their
roles in the economy in part to the secular aspirations of the state. In setting out
constitutionally independent of all religions, The Indian State has left the
economy vulnerable to religious competition in various ways, from the provision
of infrastructure to communal conflict. The Indian state has been penetrated by

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religions- by the routes of political patronage, by the consequences for minority


politics of reservations and by unequal treatment of religions. As a result of this
penetration, neutral development policy will have differential impacts on people
of different religions.

Caste:

In India, most Backward Castes and Scheduled Castes form 80% of the labour
force. Backward castes are gaining ground as owners of businesses, but Forward
Castes dominate the concentration of capital. A third of all firms use family
labour alone while a further 15% will not employ labour not of their caste. So,
nearly half the firms are caste-homogeneous. The local economy is increasingly
organized in corporatist forms based directly or indirectly on caste. The
regulative roles played by caste vary with the position of individual castes and
the distribution of castes in different states.

The disposal of waste is part of a paradigm of service and subordination where


caste and gender still reflect rank and stigma. Schedule caste labourers do the
sanitary work, but they have also entered trade in commodities with certain
physical properties, such as foodstuffs with skins, or things that have to be
transformed by cooking prior to consumption, or that are traded in physically
dirty surroundings. Caste has been reworked as an economic institution, ad it is
least flexible at the base where social disadvantage is most entrenched. While
caste/trade associations are intermittent and called into life only when the trade
is threatened, many, especially those of business sectors in which Backward
Castes operate, ate playing increasingly important roles in regulation. These
include the rationing of entry to a trade, the definition of proper contracts, the
settlement of disputes, collective insurance, and collective security.

Quotes and (or) Views Supporting Views/Points


The author gives a counterpoint to the
argument stating that the remnants of
Caste is no longer an important agent occupation based castes are organised
of social placement of control – Andre in several loose hierarchies based on
Beteille of India work, diet, religion

Note: The article contains a lot of examples, this summary does not concentrate
on the examples and rather we have tried to emphasis more on the content.

The article’s focus is on India's informal economy, what Harriss-White calls "the
economy of the India of the 88 per cent". This term is used since more than 74

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per cent of the population is rural and another 14 per cent lives in towns with a
population below 200,000. The remaining 12 per cent lives in metropolitan cities
(page 1). The informal economy generates 90.3 per cent of all livelihoods in India
and 60 per cent of the country's net domestic product. Her study of the informal
economy leads us, as well, into the country's black economy, with which the
informal economy overlaps at several points.

White's central argument in the book is that "the social structures of


accumulation" in India create "the matrix through which accumulation and
distribution take place" .She argues: "In the India of the 88 per cent, it is clear
that a range of non-State social structures, and the ideas and cultural practices
attached to them, are even more crucial for accumulation than they are in
industrial societies. Six reasons are explored in this article: the structure
of the workforce, social classes, gender, religion, caste and space"

Harriss-White draws primarily on data on small-town India, arguing that this is


where one can best examine "the non-corporate (economy) in which 88 per cent
of Indians live and work" .To delineate the micro-economies of small-town India
where the "intermediate classes", who are her main focus, reside, she draws on
her own field research from northern Tamil Nadu.

The article focuses on the business classes in their daily dealings with each
other, with their workforces and with the local state, reveals the ways in which
the local economy is very tightly - though "informally" - controlled and regulated
by these mercantile business classes. Her detailed documentation of the
business methods of these "intermediate classes", shows the ways, mainly
hidden but sometimes brazen, by which the state's control is neutralized and
rendered harmless, competition is eliminated, and new entrants kept out of the
market. (A lot of examples are given for the same).

Harriss-White argues that it is these intermediate classes that are, in fact, the
dominant segment in India's economy. She defends this thesis by arguing that
the informal economy, in which the intermediate classes are hegemonic,
"accounts for two-thirds of Gross Domestic Product (GDP)" and that "at least half
of the informal economy is `black'" .This is why she characterizes the informal
economy as "anti-social" - it is regulated by the intermediate classes and ruled
by their narrow values based on self-interest.

White further argues that the size of the intermediate classes is growing and a
"new wave of small capital, based on primary accumulation, is reinforcing and
expanding the informal and black economy, intensifying the casualisation of
labour and transferring the risks of unstable livelihoods to the workforce". The
severely exploited labour force is radically subordinated and "labour is regulated
through the social structures of gender, religion and caste, and of local markets".
Her study of the local hegemony of the intermediate classes leads her to
conclude: "Fraud and tax evasion are part and parcel of Indian capitalism.... The
bulk of the economy is beyond the direct control of the State. Countering this
literally anti-social economy calls for the emergence of a more robust and active
culture of collective accountability".

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The other issue this article raises is the arguments relating to the impact of
India's religious pluralism on the structure of its economy and the question of
whether capitalism in India is proving to be the "social solvent" that it was widely
expected to be. A major contribution of this article is its discussion of the
debates on "industrial clusters" (or "industrial districts") in India. Here Harriss-
White argues that the overly positive view of "industrial clusters" and "flexible
specialisation" in India, that currently prevails, is quite mistaken. She points out
that industrial clusters are a common, not exceptional, form of development in
India. Low technology is usual in these industrial districts. Contrary to what
cluster theory enthusiasts, whose numbers are growing, claim, most industrial
clusters do not have the "developmentally positive potential" shown by highly
exceptional clusters like Bangalore and Tirupur. In fact, most industrial clusters
in India excel in the "super-exploitation" of workers, especially women and
children.

Importantly - and this is a fact that cluster enthusiasts often choose to ignore in
studied silence - a lot of field research shows that entrepreneurs demonstrate "a
complete disregard for anything other than private profit". This, coupled with
"the inadequate and negligent enforcement of effluent standards" by the co-
opted state, has resulted in vast tracts of agricultural land being rendered unfit
for agricultural use, while large sections of local populations have been deprived
of their sources of drinking water, because these are now toxic. In Tamil Nadu
such disasters have occurred in the Palar Valley (due to tanneries) and in Tirupur
(due to the hosiery industry). The state has remained indifferent or slow and
extremely reluctant to act against the entrepreneurial class, with whom it is in
close collusion. The result is that the burden of these "negative externalities",
created by highly profitable (and much admired) industries, falls, crushingly, on
those least able to bear this environmental disaster - the virtually
disenfranchised rural poor.

The article describes the strength of the powerful political and institutional forces
that rule the economy today, in unholy alliances that have institutionalised
corruption and fraud, making them an accepted, everyday part of the economy.
These hegemonic forces have created almost overwhelming obstacles to the
possibility of "democratically determined accountability".

India’s New Entrepreneurial Classes: The High Growth


Economy and Why it is Sustainable
Sunil Bharti Mittal

Summary by Tarun Kumar

The article is from the speech of Sunil Bharti Mittal at Center for the Advanced
Study of India, (Occasional Paper Number) on 25th February 2006. The article
outlines the story of economic development of India since independence. The
story of economic reforms in India and the associated political repercussions
have been presented by Mr. Mittal in his speech. He further goes on to establish

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various factors which ensure that India’s economic growth is permanent and
sustainable.

Important Quotes

Quotes and (or) Views Supporting Views/Points


Mahatma Gandhi – First they ignore Story of Bharti showcased all the four
you, then they laugh at you, then they stages
fight you, and then they lose

Point wise Summary

Summary Supporting quotes and (or) examples

Main issues after independence • Famine, hunger, poverty

• Refugees from Pakistan


Socialism was not only fashionable but Serving humanity through state
appropriate intervention was a global norm
India in 1947-64; under Jawahar Lal • Command and Control economy
Nehru • No role of private sector except in
core sectors e.g. Tatas, Birlas
• Govt. Job was most coveted one;
IAS, IPS


Profit motive was considered
unjustified
India in 1964-65; under Lal Bahadur 1965 war with Pakistan; India was
Shastri unprepared after 1962 China war;
setback for economic momentum
After 1965; Under Indira Gandhi • Shaky start; until 1969
• Bangladesh war in 1971;
Supremacy of India established
• Concept of mixed economy
floated
• By 74 politics again overwhelmed
economics


Some business houses like Modis,
Oswals showed up their presence
Emergency of 1975-77 Setback to business houses coming to
mainstream economics
1977; First Non Congress government Non Gandhi Government failed
in Centre miserably

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1980; Return of Indira Gandhi to power • Support to private sector along


with dealing with poverty and
hunger

• Bharti & Reliance born during this


time
Indian economy under Mrs. Gandhi • Complex import-export policies;
license raj
• Lack of transparency; Only
incremental steps taken to
improve economy
• For e.g. sudden ban on import of
generators under pressure of
Indian manufactures
• China overtook india in growth
rate

• Industry were developed with aim


of export to Soviet; estranged
with US; close ness to US helped
china
1984; Assassination of Indira Gandhi; • Increase in opportunities to new
Rajiv Gandhi took over as prime entrepreneurs
minister; lost in 1989 • Introduction of computers;
manufacture of telecom device
and private air taxies
• Rajiv loss strengthened view that
economic reforms are political
suicide

• Bharti enters telephone


manufacturing
1989-91; After Rajiv V P Singh came to • New hope to non business class;
power followed by short stint by attack on business houses; fall of
Chandrasekhar growth rate
• India reached verge of bankruptcy
• Pledged gold in international
markets
• Big Business houses grew bigger
but no opportunities to new
enterants

• Entrepreneurs move out of India


1992; P V Narasimha Rao takes over; • Removal of license raj; deftly
lost in 1996 unshackled from Soviet union

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• New entrepreneurial classes


emerged
• Although govt. Supported but new
entrepreneurs had hindrances of
bureaucracy and established
businesses

• Emergence of companies like Jet,


Zee, Infosys, Wipro, Satyam
Vajpayee took over but reforms • New telecom policy; mergers and
continue collapse of various companies

• Lowest tariffs in world

Unique business model of telecom • Technology was outsourced to


industry in India IBM, Ericsson, Nokia; Bharti got
involved in customer relationships
Reforms continued under Dr. • FDI in telecom raised to 74%;
Manmohan Singh equivalent to that in developed
countries

• Gradual development of Stable


policie, low taxes, infrastructure
Service Sectors which have potential of • Software, BPO, ITES (already
exploitation; Capability to add 1.5% to tapped)
growth rate • Healthcare; Tourism; Innovation
and R&D

• Creativity and Entertainment


industry
Manufacturing Sector • Lost opportunity to China

• Still sectors as biotechnology


Agriculture Sector; Gaining Attention Use of technology can enhance exports
Sustainability of Indian economic • Large market size
growth
• Large working population
Issues to tackle • Regional inequality – mismatch in
population distribution and
contribution to GDP

• Urban and rural balance in


development
Other Issues in Q&A round • Undertaking of CSR by many
companies
• Need to develop good relationship

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with smaller neighbours


• Need of Infrastructure; power,
roads, airports, education

• Need of Tax Reforms

Introduction
Arvind Panagariya

Summary by Mohamed Afsal Majeed

An Analytical account and Interpretation of major economic developments in


post-independence India and a look at the Current status of policies and a
roadmap for future reform plans.

INDIA: THE EMERGING GIANT

Summary Supporting Views/Points


Indian Growth story is considered Four factors favouring this
more sustainable than China. It is 1) Growth has changed existing
predicted that India’s GDP growth rate conditions in India. E.g. More
between 2015 and 2050 will exceed all integrated with the world, better
other countries. access to innovations in the world
2)Due to strong external sector and
large Forex reserves – prospects of
depreciation of Rs is low
3)Demographic transition-huge
working age group
4)Savings rate will increase-Low
contribution of corporate savings to
total Savings, unlike China

GROWTH AND REFORMS

Summary Supporting Views/Points


Indian Growth in Four Phases
Phase 1: 1951-1965 1) Growth rate from 1% to 4.1%
2) Relatively liberal policies
3)But Balance of Payments crisis led to
introduction of Foreign Exchange
Budgeting(FEB) in 1958
Phase 2: 1965-1981 1) FEB led to tightening of imports and
investment by mid 1960s
2) Major shift to State Control during

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Indira Gandhi rule. Nationalized


commercial banks, oil companies and
coal mines
3) Ease of control in 1970s & 1980s
Phase3: 1981-1988 1) More liberalization
2) Fiscal expansion , financed partially
by External Borrowing
Phase 4: 1988-2006 1) Balance of Payment Crisis 1990-91
1991: Systematic reforms by Dr. 1) Dismantle licensing machinery &
Manmohan Singh(then Finance raw material imports
Minister) 2) Low industrial tariffs
3) Open to foreign Investment
4) End investment Licensing
5) Tax reforms
6) Liberalization of financial sector
7) Trimming fiscal deficit
->7.1% growth
1999: A B Vajpayee Reforms 1) Open economy to foreign and
domestic competition
2) Build infrastructure
3) Import licensing on Consumer
goods ended
4) Tariff rates reduced
5) Reforms in telecommunication
sector
6) Several PSUs transferred to private
hands
2004: Manmohan Singh Government 1) Reforms slow down due to left
pressures

POVERTY, INEQUALITY and REFORMS

Summary Supporting Views/Points


Reform Era(post 1980s) witnessed
more poverty alleviation
Author believes that inequality should 1) Politicians opt equality oriented
not be a focus in policy making policies that hamper growth,
2) Tilting policies in favour of small
firms punishes the economy. Eg.
Construction of world class roads on
time is possible only if the contract is
awarded to large firms.
3) Tax expenditure policies are anti-
poor and aggressive. Big farmers
capture all subsidies

THE POLITICAL ECONOMY OF POLICYMAKING

Summary Supporting Views/Points


With parliamentary democracy of India Opposition to specific reforms from 3
a determined leader at the top plays a sources

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decisive role in Policymaking. Policies 1) Ruling Party 2) Opposition Party 3)


are more intended to win elections Those affected.
than to reduce poverty These entities interact.
A strong leader can overcome
opposition
Central Government reforms not
effective in
1) Areas under purview of states e.g.
Land reforms
2) labour rules. (labour unions
guarantee vote banks and hence
supported by parties)
UPA attributed is victory in 2004 1) State level politics critical in
elections to the general public determining outcomes in each state
perception that NDA reforms were 2) Southern parties like DMK switch
anti-poor. But this is not entirely true sides prior
To elections
3) Anti-incumbent sentiments at state-
level
4) Voting pattern did not support the
interpretation.

ISSUES IN MACROECONOMICS

Summary Supporting Views/Points


India has a relatively stable 1) India witnessed only occasional
macroeconomic environment. Focus crisis which are mild and short-lived
on efficiency only recently 2) Inflation largely on single digits
3) Employment rates stable
Large Fiscal Deficit and Public debt are
serious reform issues relating to
Macroeconomic policies
RBI has reasonably well 1) Avoided short-run fluctuations in
exchange rate
2)Steady inflow of foreign investment
and remittance
Should India allow Full Capital Account
Convertibility? – Permission to convert
any amount of rupees into other
currencies
Considerable freeing up of financial 1) Interest largely market-determined
markets since 1990s 2) Proportion of Non-performing assets
lowered
3) Ease of entry of private banks -
competition
Capital Markets: greater progress in 1) Corporate bond market remains
Equity market compared to Bond thin
market 2) SEBI setup in 1987, statutory status
in 1990
3) Derivative trade introduced in 2000
4) FII active players in market
5) Private MFs and Insurance emerged
6) IRDA setup in 1999

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7) Pension funds yet to penetrate


unorganised sector

TRANSFORMING INDIA

Summary Supporting Views/Points


The Ultimate Development Problem – 1) Share of Agriculture in GDP has
Transforming rural agrarian economy fallen(28.5 to 16.5 from 1991-2005)
into modern one 2) Outside agriculture, about 90%
employed in informal unorganized
sector
Slow growth of unskilled sector ->
Slow growth in manufacturing sector
-> Slow industrial growth -> Slow
transformation
Suggestion to increase pace
1) Remove growth barriers in unskilled
sector
2) Agricultural reforms to connect
farmers with urban market
3) Removal of tariffs and export
subsidies
4) flexible labour market regime in
SEZs
5) Anti-dumping support policies
6) Speedy conclusion of Doha Round
7) labour market reforms
8) Revival of Genuine privatization
9) Building of Urban Infrastructure
10) Reforms of higher Education

TELECOMMUNICATION: A TRIUMPH OF REFORMS

Summary Supporting Views/Points


New Telecom Policy (NTP) of 1999 – A 1) Separated the Service Provision
Crucial step in the revolution. (now BSNL) and policy making arms of
DoT.
2) Introduced Unified License – allowed
license-holder to provide wireless and
wire-line service

Can this success be replicated in Possible but takes some time


Electricity? 1) Most state governments ill-
equipped to implement independent
regulatory regime
2) Private entry limited as the principal
consumers are financially weak state
entities

TRANSPORTATION: A MIXED RECORD

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Handout Summary Business, Government and Society

Summary Supporting Views/Points


Success in two areas Major Achievements
1) National Highway Construction National Highway
2) Civil Aviation i) Near completion of Golden
Quadrilateral
Domestic Civil Aviation
i) free entry into airline industry
ii) Public Private participation in
construction of Airports
Two black marks
1) Rural Roads
2) Urban infrastructure

PUBLIC DELIVERY OF SOCIAL SERVICES: A FAILED EXPERIMENT

Summary Supporting Views/Points


Government of India has grossly failed 1) Most of the healthcare by private
in delivery of public services like hospitals
education, health and water 2) Rampant absenteeism among
Government health workers (40%)
3) Private schools account for 18%
students in urban areas
4) Quality in public schools poor
5) Teacher absenteeism
6) Higher education in shambles,
under control of central government
Author’s suggestion:
1) Learn from infrastructure failure.
Deploy private sector more efficiently
in public services
2) For outpatients, transfer cash and
let them choose the provider
3) Provide insurance for inpatients
4) provide education vouchers for poor
5) Complete overhaul of Higher
Education

Banias and Beyond: The Dynamics of Caste and Big


Business in Modern India
Harish Damodaran

Summary by A V Naga Chaitanya

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Handout Summary Business, Government and Society

The article examines diversity in economic and business spheres.

Quotes and (or) Views Supporting Views/Points


The Author is of the view that Dr.
“We are going to enter a life of
Ambedkar’s prognosis stands vindicated
contradictions. In politics we will
even today.
have equality and in social and
1. Politics: Increasing involvement of
economic life we will have
lower castes in Indian politics
inequality” – Dr. B. R. Ambedkar at
2. Business: Situation is better off
the penultimate sitting of the
than in 1947 but still long way to
Constituent Assembly
go
Southern enterprises run by non-trading
classes: Eenadu(Kamma), GMR (Komati),
Asianet(Nair), Many sugar mills in
TN(Gounders), The Hindu (Brahmins)
South India is much better off than
North: Business dominated by Bania
north India as far as involvement of
castes. Jats the primary growers of sugar
non-mercantile classes in business
and Gujjars the primary owners of milch
is concerned. The West does better
cattle have little or no presence in Sugar
than the north
mills and Dairies.
West: Peasant castes like Marathas and
patidars have made successful entry in
to industry
Education: Exposure to English and
technical disciplines in south->formation
of middle class->better employment and
wealth->further stress on education. The
north still has a long way to go.
Affirmative Action: Non-brahmin
Reasons for regional disparity in the movements in South ->redefined social
involvement of non-mercantile hierarchies->forced upper castes to look
classes in business for alternative employment->socially
heterogeneous middle class
Stranglehold over business by
traditional communities: Chettiars
and Komatis of the south were nowhere
as overbearing as the ‘ubiquituous
northern bania’
There are three general trajectories
of industrial transition by
communities
1. Bazaar-to-Factory route:
Banias and Vaishyas
2. Office-to-Factory route:
Brahmins, Khatris, Kayasthas
and other scribal castes
3. Field-to-Factory route:
Involved – Shudras: one of
the castest in the
chaturvarna system ,–
Kammas, Reddys, Jats,
Patidars, Marathas, Nadars
etc.

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The authors did not come across a single


dalit industrialist in their studies – even in
The Dalits however, have little or no the south. The rise of BSP is expected to
presence in business create a favourable environment for
Dalits to enter business (mooting tax
breaks). Buts its still early days.
The Nadar Mahajan Sangam financed the
Tamilnad Mercantile Bank to finance
Caste identities are ephemeral in
Nadar entrepreneurs. Over a course of 70
the business space. Capitalism
years(1921-1990) the bank changed
overrides ideals of collective
hands to finally end up in the hands of a
enterprise
California-settled Mudaliar. The Sangam
could do nothing to prevent this.
Community feelings are strong
amongst the financial weak. But
community feelings are invoked by
the elite, it is usually done with an
opportunistic intent.
Even regional and other ethnic
identities fade in the business
space. An emergent bourgeoisie
may play up subnational pride and Dismantling of licence raj occurred
provincial politics (Telugu Desam, almost simultaneously with coalition
DMK, Akali Dal etc.). But as capital politics becoming the order of the day.
accumulates the lines between Regional parties are propping up the
regional and national bourgeoisie national government.
are blurred. Previously provincial
demagogues develop greater stakes
at the centre.

Summary

Summary Supporting quotes and (or) examples


Diversity in the political sphere is much
greater than in the business sphere.
The involvement of non-mercantile
classes in business has been higher in
South and West than in North. Three
reasons:
1. Education
2. Affirmative Action
3. Strangle hold of mercantile castes in
the North
Castes have taken three routes for
transition to business
1. Market-to-Factory: Mercantile castes
2. Office-to-Factory: Scribal castes
3. Field-to-Factory: Sudras
Dalits still have no presence in
industry. Even in the South.
Caste,regional and ethnic identities
fade in the business sphere as capital

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accumulates
As capital accumulates the identity of
national bourgeoisie becomes stronger.
Regional parties develop greater stakes
at the centre. Coalition politics becomes
the order of the day.

Traditional Female Moral Exemplars in India


Madhu Kishwar

Summary by Jagadeesh

The write-up is about the flexibility provided by the Hindu religion to its followers
in terms of moral codes with an emphasis on the female deities and their
relevance to the lives of Hindu women.

Quotes and (or) Views Supporting Views/Points


The Hindu religion is highly flexible and allows The central theme of the passages,
great degrees of freedom to its followers to which is brought out with many
interpret and follow the religion. examples.
Hindu religion reveres the females among the Gods Explained through the examples of
and humans and the Hindu society bestows a huge Goddess Shakti who is not dependent
amount of power to the Goddesses and ladies on any male God and Meerabai who
devoted to a cause. flouted society’s rules through the
virtue of her devotion.
The divide between humans and the Gods are not Incarnartions of Gods on earth and
sharp in Hinduism and the Gods are changed or the elevation of humans to the divine
created with changing times. level. Interpretations and redefinition
of Hindu Gods explained with
examples.

Supporting quotes and (or)


Summary examples
The Hindu religion allows atheists to be an integral The Hindu divinities do not issue any
part of the community without punishing them. commandments.

The deities have been ingrained in the collective It is very common for a dutiful son to
psyche of the community. They are not perceived be praised as Ram incarnate.
to be distant heavenly figures, but are present in
most people’s lives. The gods demonstrate
standards of morality which are not prescriptive
but can be interpreted and emulated (not
replicated) by the followers.

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There is no sharp divide between the divine and Vishnu’s incarnation, Ram though
the human. Gods descend to earth and allow touted to be the best of men, till date
themselves to be judged by believers and non- receives sharp criticism on his harsh
believers alike. They do not claim perfection treatment of Sita.
The religion allows its followers to rewrite and Ramayan and Mahabharat have
redefine the roles of Gods. hundreds of known versions.
The religion even allows humans to punish Gods. Yashoda punishing Krishna for his
pranks (Story)
Drought prone villages immerse the
idol of the deity in water until the rain
arrives (Reality)
Humans are allowed to be elevated to the divine Meerabai achieved divinity through her
levels for their exceptional devotion in matters Bhakti.
ranging from morality to valour. A lot of importance Ganesha won the right to be the first
is attached to people/Gods who devote themselves to be invoked in religious rituals by
to a cause larger themselves, those who are treating his parents, as his entire
extraordinarily committed towards performing their world. Pundalik through his devotion to
worldly duties. Parents and their kids are expected his parents could mesmerise Lord
to love each other more than themselves. Krishna make him stand on a brick for
a very long time.

Feminine energy is believed to represent the Every God is static/dead without


energising force of every being and everything. Shakti. But Shakti is complete in
herself. She needs no male to
legitimise her power.
The followers have the freedom to create new Creation of new Gods like Santoshi Ma
deities if required, which allows them to get closer and Bharat Mata who are products of a
to their Gods. particular era.
Women who manifest extraordinary strength and Village women who rise in rage against
are not afraid of men are treated with reverence. men grow in stature and become
Any woman could exercise this strength to bring village deities.
order to the chaos around them. Even Indira Gandhi was compared to
Durga.
Hindu women have a wide range of moral Sita is deified, so are other saints like
exemplars. One category reveres the marital bond, Meerabai, Avvai, Andal, Akka
yet another category of female saints are those Mahadevi and Lal Ded who either
who abstain from marriage altogether. rejected or walked away from
marriage.
Hindu women, once they devote themselves to a Meerabai despite being a Rajput queen
higher religious/social/political cause, are allowed could flout all the rules of the society
to break all the rules of the society. Celibacy is through her unflinching devotion to
considered a sign of power derived from high levels Krishna. The participation of women in
of resolve. Thus single Goddesses like Durga the Freedom movement was likened to
provide a role model to the women who want to opt Meerabai’s devotion.
out of matrimony.
Hindu Goddesses are potrayed to preach peace Proven by the fact that there are no
and co-existence. clashes between Goddesses while the
devotees of male Gods have known to

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fight each other historically


Hindu shastras emphasise that codes of morality Gandhi used Sita as a symbol to
have to be time, place and person specific. The promote women’s liberation. His Sita
religion allows us to rework our codes based on was no slave of Ram and even Ravan
changing times. was afraid to approach her. The
essence of Satyagraha which is
securing a moral victory over one’s
opponent by winning his heart is
exactly how Sita managed to be one-
up on Ram.
In Hinduism the right to interpret and attribute No orthodox Hindu opposed the use of
meaning to the Gods belongs to each devotee. Sita by Gandhi.
Thus Hindu religion and culture have extraordinary
versatility and ability to adapt to diverse situations.

Pangs of Change
MN Srinivas

Summary by Rithin B

The author speaks about India as a secular miracle of the world but suffering
from poor quality of democracy.

Indian democracy is one of the secular miracles of the modern world and is a
model for developing countries. Democracy is becoming deeply rooted through
Panchayat Raj and Nagarpalika Acts. Though India is emerging as a major power
the rate of growth is slow. The leaders do not seem to care about the country’s
fortunes but in spite of its leaders India is still showing progress.

Transfer of Power: Decentralization of power to districts, tehsils, villages, cities


and towns has made government officials accountable to the people. Though
decentralization has brought about speed, efficiency and openness, it has also
given rise to conflicts in Panchayat raj system. Rural dominant classes occupy
privileged positions and use their power to receive services from other backward
classes in the society. Failure to perform such services leads to bloody clashes
which lead to translating the constitutional commitment to equality into a reality.
The police, law courts, media should support the Dalit demand for equality and
make the dominant castes to accept democratic values and practices.

Quality of Indian Democracy: The quality of our Democracy is poor. This is


reflected by the low literacy rate (48%) at national level. This is even lower in
the BIMARU states (Bihar, Madhya Pradesh, Rajasthan, Uttar Pradesh) which also
presents very low female literacy rates. Political parties are trying to make

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education a fundamental right believing that public interest litigation will atleast
goad the states to implement it.

One of the achievements of our democracy is banning of untouchability


(Article 17) by constitution of India (1950) by making its practice a cognizable
offence under the Civil rights Act 1975. This is viewed as incidental to
constitutional assertion of equality of all citizens which prohibits discrimination of
citizens on the grounds of religion, caste, race, sex etc.

Reservation of seats in legislatures, education and employment for


scheduled castes and tribes is a continuation from the colonial rule. This is
intended to protect and promote the interests of groups who thought they would
suffer under conditions of open competition. Reservation in legislatures is to
enable them to work for the betterment of their communities and constituencies.
Empowerment of backward classes occurred prior to independence in South
India and post independence in North India.

Job reservations for OBCs developed into a national issue in 1990.


Secondary Backward Classes Commission had made several recommendations
for improvement of backward classes. In 1989, Janata Dal included this in its
election manifesto. Janata Dal’s leader V.P Singh agreed to implement the
mandal commission’s recommendation of reserving 27% of government jobs for
backward classes. This created considerable unrest in the country. Nehru’s aim
of establishing “casteless and classless society” gave away under V.P Singh’s
leadership to “socialism with caste farce” ideology. Many People hailed V.P
Singh’s decision as a “secular revolution” while others considered it extremely
divisive. In 1992, Supreme court provided approval for 27% reservation of
government jobs to OBCs. It decreed that quantum of reservation should not
exceed 50% and also to exclude the creamy layers among the backward classes
from the benefits.

Reservation has become popular in the recent years as a means to access


education, employment and power. Reservations are being demanded by
different communities on the whole (Muslims, Dalit Christians) and/or for the
backward classes among them. This has lead to conflicts as scheduled castes
believe that providing reservations to these communities would cut into their
share of quota.

Woman reservation seeking 33.3% reservation in Parliament and state


legislatures has become an emotive issue which has been further complicated by
demand for “sub reservation” for women from OBCs.

Reservation is now unfortunately treated as a panacea for poverty, lack of


education, employment, political power. Reservation is helpful only up to a
certain point and it can’t be used as a tool for restructuring the society. The
benefits are mainly used by the creamy layers rather than the deserving. This
causes envy among the very poor groups of such classes who become bitter and
antagonistic to the scheduled castes. Such envy is widespread among the
dominant classes who are unable to adjust themselves to the easy access

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provided to the backward classes for education, employment etc. This results in
clashes between the dominant and the scheduled castes which will further
increase as education spreads. This revolution will not be swift and bloody but
rather long and bleeding.

Reservation seems as a total solution to backwardness in India. Those in


power think that once reservation status is provided to a group, the government
responsibility towards such group ceases. No attention is given to monitor the
progress of such groups. No measures are taken to ensure that the backward
classes are benefited from these reservations.

Finally reservation fails to address the most important problem of the


country i.e, mass poverty and the many ills associated with it. Resolving mass
poverty issues involve addressing failure to make primary education universal,
lack of primary healthcare facilities, drinking water and sanitation problems,
neglect of girl children and empowerment of women. Eradication of mass
poverty would help in releasing and utilizing the creative energies of people in an
efficient manner.

Another striking but not sufficiently addressed issue is the great divide
that exists between the leaders and the people of the country. Leaders are
involved in using power to their own good rather than that of their people. As
Gandhi once said “My people are ahead of me, I must run and catch up with
them for I am their leader”. But today’s leaders are not even aware that the
people are far ahead of them.

Democracy and Secularism in India


Amartya Sen

Summary by Anjan Kumar

It is a section taken by Mr. Amartya Sen from a chapter named “What is wrong
with India?” from one of the talks delivered in Cornell University. He has tried to
bring out the loopholes which still persist in Indian democracy and secularist
form of system, compared with authoritarian countries, scope of development
and merits of following the system.

He asserts that Indians should rightly learn from their errors of the past and must
not forget our social commitments based on which we galvanized as a nation,
pre independence. The same was reflected in our aspirations to set the country
free.

We pledged to mould India into a secular and democratic country. It was a


challenging task more so because none of the poor country were both and India
was experiencing bloody communal riots at that point of time. However, as we

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grew the vision seem to be plausible. But in the process, the underlying
principles suffered hard knocks. Embracing this system of government has many
a times led to frustration as it didn’t deliver as was expected. On the other hand,
Authoritarian countries like South Korea, Singapore and China seem to have
achieved much more in economic growth and enrichment than India has. India
though has tried to become a secular country but due to multi-ethnic and multi-
religious conception, it has always been a pro-Hindu country. But the “proto-
Hindutva” which is basically the group surrounding the hard core of “Hindutva”
are less extremist. There are other challenging questions like endemic hunger, ill
health, illiteracy, gender in equality, inequality of class, survival of social barriers
of caste, unequal economic opportunities etc which India should worry about.

Advantage of Democracy:

Indian democracy has been affected by violation of political and civil rights and
individual liberties. Economic growth is important in removing poverty. In
assessing the democracy we must also taken into account its impact on the lives
and capabilities of citizens. The role of eradicating famine has received attention.
The financial crisis in countries like South Korea, Thailand Indonesia took its toll
on these nations and hence, during famines the people didn’t have voice to raise
the issue. Democracy gives an opportunity to opposition to change the policies
even when the problem is chronic.

China and India:

(1) Greater Chinese success in handling endemic deprivation

(2) Larger Chinese success in making use of the opportunities from global
trade

(3) Worse Chinese records in handling the famines

(4) Greater life expectancy of Chinese people than Indians

(5) Radical economic reforms in 1979 gave an advantage if nearly two


decades to china

However, India of late has surpassed the life expectancy rate as compared to
china. In India, the rate grew three times after independence while in china it
came to a stagnation point. Kerala whose life expectancy is 75 is greater than
china’s 70 which was earlier dominated by China. It is possible to argue that
Kerala, with its left leaning politics and competitive democracy combined has the
same kind of political commitment that favored china as a whole over India.

If something lies wrong in Indian democracy then it is in timidity of its practice. It


will depend upon certain factors such as preservation of democracy, much
greater political focus on social progress, incentives and openness and equity
among different economic groups.

Assessment of secularism:

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The incidences of Babri Masjid case and the attack on minorities in Gujrat
(Riots), has made Proto- Hindutva group to criticize severely the secular
commitments of India at the time of independence.

There are two facts which cannot be denied:

(1) The statistical fact that Hindus form the overwhelming majority of Indians.

(2) The historical fact that Hindu tradition is more than 3000 years old in
Inidan history and has its imprints on Indian culture.

Hence, Hinduism cannot be treated as a mere set of beliefs of one community


among others in a multi-religious and secular India. And yet India has more
Muslims than any other Muslim nations. Indian constitution recognizes that the
rights of minorities are not violated and the political and legal fairness of demand
of rights exists for every citizen of India. There is nothing called majority in India
as it can be categorized under different segments like set of non rich people, set
of rural residents, people who do not work in the organized sector etc. Hence,
the statistical facts given for Hindutva can be discussed on a broader perspective
than in figures. When Bangladesh wanted a separate nation it was not because
their religion was different from west Pakistan but based upon their language,
literature and political priorities. The weakness in Hindu majoritarianism lies
because there are other parameters which is to be considered like class, region,
literature, political convictions, language, culture etc. Hence, the statistical
argument is misconstrued and hollowed.

The other argument of Hindutva because of its strong


presence of historical background is also a misconception. The Buddhism,
Jainism and Christian communities which lasted over a millennium in Indian
civilization has deeply impacted its culture and society at large. Evn before Islam
arrived in India, it was known as a Budhdhist country and hence, the arguments
are futile. Gandhiji and Rabindrnath Tagore both wanted India to be distinct in
its identity but not on the basis of privilege of one community over other but on
political reasoning.

Affirmation without Reservation


Pratap Bhanu Mehta

Summary by Ravi M V

Quotes and (or) Views Supporting Views/Points


Author feels that there has to be a middle Malaysia has extensive
ground when it comes to reservations. And programme for private sector
reservations are not against a country reservation but it still has
development. prospered economically.

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Summary Supporting quotes and (or)


examples
Those Who seek reservations are a bit
ingenuous when they tell that such reservation
in the private sector will solve all problems for
the dalits and the poor.
Reservations alone will not alleviate the
conditions of the marginalised communities of
India
Proponents of reservation are on much stronger Malaysia, US, Canada, South
footing when they base arguments on the Africa have anti
premise that Indian labour market require anti discrimination legislatures
discrimination measures
Similarly reasons opposition to reservations are
untenable
Most dalits feel that they have too much to lose
by the liberalization. Some commitment will
have to be made to demonstrate that dalits will
not be left out of the wealth creating process of
market.
Modern India has record of policies that are
undertaken in the name of deprived sections
but hurt them the most.
By resisting reservations corporate India is
missing out on an opportunity to leverage some
real change. Reservations could be part of
dialogue on restructuring of the labour market
that yields more optimal trade offs.

There is widespread impression that for all the


talk of merit, recruitment in the private sector is
not fair, open and transparent.

It is dishonest for industry to talk about merit Openings are not listed in the
when most of its policies hinder the discovery of employment exchanges.
talent.

Indian industry would do itself some good, if its


own norms of recruitment became more
professional and open.

Who gets to decide what merit is? Standard


signals like educational qualifications are not
adequate signalling devices for merit and the
corporate sector relies on more intangible
measured qualities that cannot be ranked.

What employers fear is that conceptions of


merit will be imposed upon them from outside
to determine whether or not they are being
discriminatory.

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The debate on who should be the beneficiary of


affirmative action is complicated. There is a
national consensus that scheduled castes and
tribes should be the prime beneficiaries of
affirmative action. There is comparatively less
consensus on reservations for the OBC
population.

When we talk of the private sector it is clear A case could be made for
that something approaching 50% reservations limited reservations in the
makes a mockery of the private sector's status 22.5 percent range.
as private. Unfortunately reservations have an
inherent nature of escalation and expansion.

Anti reservation lobby says that the concept of


reservation should be only related to poverty
but in this case the argument is flawed as
people can be poor for any number of reasons
as a stagnant economy and their own individual
choice. Reservation on caste basis takes this
point into account that the dalits are oppressed.
Their probabilities of success are simply low
because of who they are.

There is crucial conceptual distinction between Conceptually anti


a non discrimination principle and affirmative discrimination and
action. Non discrimination is more like a passive reservations are different but
principle. It suggests that no one should be in practice they
discriminating simply because of who they are. metamorphose into one.
Whereas a affirmative action demand a
measure of fairness that goes beyond non
discrimination.

Anti discrimination legislation will have


tendency to push towards de facto reservations
i.e. by forcing companies to give equal
opportunities to all sections of society.

There are numerous other instruments for Licences for liquor shops and
affirmative action other than reservations. broadcasting licences will help
Another incentive should be the tax breaks for the dalits to be benefitted on
companies who implement this reservation for grass root level.
the dalits voluntarily.

It would be a tragedy if modern India became a


project not for transcending caste, but
perpetuating it. Unless used in a very limited
scale, reservations threaten to become the
latter.

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Redesigning Affirmative Action


Yogendra Yadav and Satish Deshpande

Summary by Anuprakash

The article talks about the quota system that has been in implementation in
India for education sector. It dissects the existing system and exposes its
advantages and disadvantages. Further, the authors propose a new model where
the quota system, though based on caste also has other factors of
considerations.

The Article discusses the following:

• Specificity of OBCs and challenges they pose to policy design

• Decision of Government of India to implement OBC reservations in elite


professional education

• Available micro-statistical evidence on which an alternative design can be


based

• Basic features of he model that addreses the group and individual


disadvantages

• Specificity and potential advantages of the model specified

Point-wise summary

Summary Supporting quotes and (or) examples


India’s affirmative action policy is
among the largest, longest standing,
most elaborate and successful
initiatives of its kind in the world.
India’s weakness - Lack of sustained Since adoption of constitution in 1950,
efforts to affirmative action policies there have been no substantial
changes in the basic affirmative action
prescription or reserving proportional
quotas in selected fields.
Virtues of targeted quotas:
1. Encourage Political solidarity
and loyalty
2. Ease of administration and
monitoring
3. Resistant to appropriation by
un-entitled group
Not necessarily the best option Examples in recent time:
• Extension of quotas to groups
other than SC/ST
• More women in legislature

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• Altering social profile of job


holders in private sector
Limitations of quota system:
1. Alters status quo of inter group
power equations
2. Political costs are higher and
social benefits are meagre or
badly targeted
Affirmative Actions and OBCs • For SCs – reservation was based
• OBC reservation has faced on the idea of untouchability
questions on precise • For STs – reservation was based
relationships between caste and on the separation from the
backwardness mainstream Hindu society and
Alternative approach undisputed poverty
• Move towards a nuances policy • Mandal conflagaration of 1990
design that captures the degree when quota system was
of disadvantage and kind of questioned
disadvantage • Anti reservation movement of
• Transition to a more integrated May 2006
policy framework where caste is
only one among the many
parameters of evaluation
Mandal II : The road not taken • Even a crude caste quota is
• Available evidence shows that better than none
OBCs as a whole are • Veerappa Moily Oversight
disadvantaged compared to the Committee on implementation
upper caste as a whole. of reservation in higher
• The caste bloc approach education
adopted by the government will • The system has to build in
help us reduce the inequality guards to prevent a handful of
• Disadvantage: Has high long- OBC communities to get all the
term costs; one dimensional benefits(who are much better
caste quota result in inefficient placed than the others)
targeting. Relatively better off • Committee can suggest some
families fro the upper OBCs will special provision for OBC
be the benefactors. women to access quota.
• Non OBC families will rightly
feel that they are more
disadvantaged than the OBC
category
• Recommendations:
o Making creamy layer
within the OBCs as the
last claimant of the
benefits of reservations
o Sub dividing the quota
into “upper” and “lower”
OBCs
• Long Term Measures should
also be taken up. Independent
organisations like National
Sample Survey Organisation can
be requested to conduct a

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Handout Summary Business, Government and Society

nation wide survey to create a


social profile of higher
educational institutions and job
holders. This will help fine tune
the policy making in the future.
• Setting up a permanent
statutory body to regularly
monitor the diversity profile of
the public institutions and
advise the government on
improving them.
Towards Better Policy Design Better affirmative actions can be
designed to cultivate the following
• The effort is aimed at explicitly features:
linking empirical information • An evidence based approach
related to disadvantages • Sensitivity to multiple
• The system should bring out the dimensions of disadvantage
basic reason why the including but not limited to
affirmative action is being caste
undertaken • Sensitivity to the inter action
• The initiative should provide effects of the different
rational explanation why dimensions o the disadvantage
specific castes and communities • Sensitivity to degrees of relative
are entitled to compensatory disadvantage
discrimination and undermines • Should introduce a stable
the attitude that treats such method of measuring things like
entitlements as birthrights interaction effects and relative
• More nuanced and intensity of disadvantage
comprehensive framework will
lead to more precise targeting –
Will produce faster and better
results.
• Disadvantage: Due to this the
policy design can become much
complicated and the
institutional mechanisms
involved can become fragile.

An Alternative Model Exact weights to be allocated for


• The new model addresses the academic performance and social
four dimensions - disadvantage will be a key issue.
Caste/communities, gender,
region and sector of residence
• The scheme should also look at
the individual disadvantages
apart from the group
disadvantages
Specificities and Advantages • While Government proposes to
• Create a bloc of reserved seats have all or nothing approach to
• Apply the proposal to all the recognising disadvantage, the

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seats not covered under the proposal given is flexible in


existing reservation for SC/ST dealing with variations in
• Disadvantage of the degrees of disadvantage.
government proposal is that it • The model proposed will push
only recognises the caste as the the thinking on social justice
sole criteria for group along constructive and rational
disadvantage lines.
• The new scheme addresses the • It will allow us to demonstrate
interaction effects between that affirmative action is not
different axes of disadvantages. about appeasement of
• The new model consider: particular castes or
individual disadvantages communities but about
relating to family background abolishing continuing sources of
and type of schooling. tangible disadvantages in our
• Disadvantage of the proposed unequal and unjust society.
model is that it intensifies caste
identities. It concentrates on the
identities rather than on the
valid social reason why these
identities are used.
• The model with its transparent
indicators , allows scrutiny and
oversight as well as legitimate
debate
• It also addresses the prickly
issues like the legitimate claim
of the poor or the
disadvantaged upper castes.

Women and the Labyrinth of Leadership


Summary by Balasubramanian A

The authors seek to analyze the current situation of women in the corporate
world and the obstacles they encounter on their ascent to top managerial
positions, popularly referred to as the C-suite1, by way of this article.

Despite progress by women in the workforce in general, (they now occupy more
than 40% of all managerial positions in the United States), within the C-Suite,
they remain as rare as hen’s teeth.

Some key facts in support of this statement are given below.

• Among the most highly paid executives in the Fortune 500 companies,
i.e. President, Chairman, CEO and COO, only 6% are women.

1
The group of officers of a business organization, who have the word "chief" in their
titles.
Hyponym: CEO

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• Most notably, only 2% of the CEOs are women

• Only 15% of the seats on the boards of directors are held by women.

We find similar abysmal figures for companies in the European Union as well.

In 1986, Wall Street Journal’s Carol Hymowitz and Timothy Schellhardt gave
the world an answer. “Even those few women who steadily rose through the
ranks eventually crashed into an invisible barrier. The executive suite seemed
within their grasp, but they just couldn’t break through the Glass Ceiling”. This
was how the famous metaphor, “The Glass Ceiling” that women are purported to
face in Organizations was born.

Through the years, Leadership has been denied explicitly to women and even
Country Heads were not privy to this. Former President of the United States,
Richard Nixon, once said,”I don’t think a woman should be in any government
job whatsoever...mainly because they are erratic; and emotional. Men are erratic
and emotional too, but the point is a woman is more likely to be.”

But the authors feel that times have changed now and the Glass Ceiling
metaphor is more wrong than right. Hence, they elaborate on the need to usher
in a new metaphor to betta

A better metaphor that confronts women in an organization in their professional


endeavours is The Labyrinth.2

As a contemporary symbol, it conveys the idea of complex journey towards a


goal worth striving for. Passage through a labyrinth is not simple or direct, but
requires persistence, awareness of one’s progress and a careful analysis of the
puzzles that lie ahead.

Walls All Around:

The following are some of the obstructions women run up against.

1. Vestiges of Prejudice:

 It is a well-established fact that men as a group still have the benefit of


higher wages and faster promotions. In the United States in 2005, for
example, women employed full time earned 81 cents for every dollar
men earned.

 A study conducted by the U.S. GAO (Government Accountability Office)


has showed that marriage and parenthood were associated with higher
wages for men but not for women. In contrast, other characteristics like
education had a more positive effect on women’s wages than on
men’s.

2
Complex system of paths or tunnels in which it is easy to get lost. In short, a maze.

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 Discriminations evidently do affect promotions. It has been found that


promotions came more slowly for women than for men with equivalent
qualifications. One illustrative study followed workers from 1980 -92
and found that white men were more likely to attain managerial
positions than white women, black men and black women.

 In an experiment, subjects were asked to evaluate hypothetical


individuals as managers or as job candidates and all characteristics of
these individuals are held constant except for their sex. Students
unwittingly evaluated the essays given to them without knowing that
all the other students had received identical essays with only the
ascribed name being different. Some had received the essay to be
written by a male candidate and others had received the same essay
to have been written by a female candidate. This study conducted in
1968 showed an overall gender bias. Women received lower
evaluations unless the essay was on a feminine topic. Some 40 years
later, experiments continue to yield similar results.

 However, there is little evidence that the odds are stacked higher
against women with each step up the ladder – that is, women’s
promotions become increasingly less likely at each than men’s at
higher levels of organizations. Instead, a general bias against women
appears to operate with approximately equal strength at all levels.
Hence, the “Glass Ceiling” metaphor does not hold.

2. Resistance to Women’s leadership:

 Essentially, a set of widely shared conscious and unconscious mental


associations about men, women and leaders fuels the discrimination
we’ve been describing.

 In psychologists’ lingo, the clash is between two sets of associations,


communal and agentic. Women are associated with communal
qualities, which convey a concern for compassionate treatment of
others. In contrast, men are associated with agentic qualities, which
convey assertion and control.

 As a result, women leaders find themselves in a double bind. If they are


highly communal, they may be criticized for not being agentic enough.
But if they are highly agentic, they may be criticized for lacking
communion. This explains the fact that people are more resistant to
women’s influence than to men’s.

 This boils down to the case where women are denied the full benefits
of being warm and considerate. Because people expect it of women,
nice behaviour that seems noteworthy in men seems unimpressive in
women.

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 Moreover, verbally intimidating others can undermine a woman’s


influence, and assertive behaviour can reduce her chances of a getting
a job or advancing in her career. Simply disagreeing can get women
into trouble. Men who disagree or act otherwise act dominant get away
with it more often than women do.

3. Issues of Leadership Style:

 Female leaders often struggle to cultivate an appropriate and effective


leadership style.

 There is a real penalty for a woman who behaves like a man. The men
don’t like her and the women don’t either.

 Styles of leadership – Transformational, Transactional and Laissez-


Faire. Women tend to be more Transformational i.e. establish
themselves as role models, state future goals develop plans, motivate
and innovate, even when their organizations are generally successful.
Men tend to be more Transactional i.e. establish give-and-take
relationships that appeal to subordinates’ self-interest such as
clarifying responsibilities, rewarding them, correcting for failures, etc.,

 An important observation has been made here that male leaders tend
to stick to Laissez-Faire mode (concerning itself with neither of the
above two) more than women do.

4. Demands of Family Life

 The most fateful turns taken in the labyrinth are the ones taken under
pressure of family responsibilities.

 Average housework time spent by men has gone up to 11 hours per


week in 2005 compared to 5 in 1965. Women spend an average of 19
hours per week in 2005 towards housework as against 24 in 1965

 Decision makers often assume that mothers have domestic


responsibilities which makes it inappropriate to promote them to
demanding positions.

5. Underinvestment in Social Capital:

 Perhaps the most destructive result of the work/family balancing act so


many women must perform is that it leaves little time for socializing
with colleagues and building professional networks.

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 This results in a compromise on Social Capital, which is more necessary


to manager’s advancement of than skilful performance of traditional
manager’s tasks.

Management Interventions that work:

Taking into account the various obstacles face in their ascent in the labyrinth
that confronts them in organizations, the following interventions by the
management have been suggested by the authors;

 Increase people’s awareness of the psychological drivers of prejudice


towards female leaders, and work to dispel those prejudices.

 Change the long hours norm – Firms must not blindly consider “hours
spent at work”. This can benefit women with family demands and cannot
spend too much time at work but are highly productive

 Be more objective in evaluation. Surveys indicate that firms are subjective


in the evaluation of people especially in terms of gender. This practice
must be avoided.

 Use open – recruitment tools, such as advertising and employment


agencies, rather than relying on informal social networks and referrals to
fill positions.

 Ensure a critical mass of women in executive positions – not just one or


two women.

 Avoid having a sole female member of any team.

 Help shore up social capital. Women should be assisted in building


networks to enhance their careers.

 Prepare women for line management with appropriately demanding


assignments.

 Allow employees who have significant parental responsibility more time to


prove themselves worthy of promotion

 Exercising of family-friendly options such as generous parental leave and


part-time work by women can seriously hamper their careers. Hence,
encourage male participation in family-friendly benefits in equal measure.

 Welcome women back.

Feminization of Poverty in Post - Apartheid South Africa


Summary by Shikha Rawat

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Main Idea:

Black women in South Africa have been oppressed through the ages
due to a patriarchal setup which encompasses the social, political and economic
spheres. Through, colonialism, apartheid and post-apartheid eras they have been
the lowest on the rung and have faced exploitation.

Summary:

Apartheid South Africa was structured socially, politically and


economically along racial lines. The separation of the black community from the
mainstream economy and withholding of political rights led to the black majority
being ‘ghettoised’. South Africa ended up having the highest Gini Co-efficient in
the world (a measure of income inequality). This system and structure of the
economy has remained unchanged in post-apartheid era.

Racial segregation and economic deprivation combined with


patriarchy had a staggering impact on the lives of millions of black women. They
have been historically allocated the role of looking after the family and putting
food on the table. This had led to their oppression by men in the workplace, by
the state as well as in the home. The poorer the woman in, the more she is
oppressed.

ANC – RDP and GEAR:

The ANC came to power in 1994 riding on the crest of the


Reconstruction and Development Programme’ (RDP). It promised free basic
services, employment opportunities for all and a rise in the living standards of
the poor black majority. However, soon after coming to power it discarded these
plans and instead adopted a standard neoliberal macroeconomic policy which
envisaged reduction of trade barriers, minimal state role, cuts in state
expenditure of development and welfare and a prominence to big business. The
Growth, Employment And Redistribution policy (GEAR) was announced in 1996.

The consequences were:

• Cuts in social grants which directly impacted the ability of poor black
women to pay for food and other basic services.

• Privatization of basic services such as water and electricity which further


escalated the plight of these women living in squalor in communities such
as Bayview.

• Reduction of tariffs, in the textile and leather industries for instance, led to
decimation of tens of thousands of jobs mostly in the low-skilled areas,
traditionally employing poor black women. This further pushed these
women into poverty.

• Minimal safety net combined with rising food prices leading to food
security crisis and presence of stunting among children.

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• Women are forced to work in informal ‘sweatshops’ or forced into begging


and prostitution to put food on the table.

• Dilemma between paying for food or for basic services.

The women of Bayview agree that their situation has worsened


since 1996. These women also suffer at the hands of abusive husbands and are
considered secondary citizens not only by the social and political framework but
also within the household. They have none of the rights but all the
responsibilities. For women living in rural areas, the situation is worse. In South
Africa, both during and after apartheid, men have held, and continue to hold
power over women and not alongside them.

In recent years there has been a rise in social movements in forms


of resistance to electricity and water cuts. People have organized themselves
into groups such as the Bayview Flat Residents Association. Most of the people in
such movements are poor black women. There is a need to differentiate this
movement from just being on the lines of race and class to one based on gender
as well.

While there have been women entering parliament and women


making it big in the patriarchal capitalist setup in South Africa, majority of poor
black women still suffer.

Quotes:

“Patriarchal capitalism defines women as performers of unpaid labour, as wives


and mothers responsible for the care of the family”

“majority of women still suffer from the secondary status imposed on women in
the community and at home through a patriarchal ideology expressed through
religion, culture, customary law and tradition”

Thirty Years On: Women's Studies Reflects on the


Women's Movement
Shilpa Phadke

Summary by M Siril Nitesh

During period of national emergency(1970), the women’s movement in India


assumed a form and role that was different from the one that existed during
social reform phase and as well as struggle for independence and is referred to
as contemporary women’s movement.

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The report (data) given by committee on the status of women in India (CWSI) in
1974 lent legitimacy to protests mounted by the women’s movement and helped
them to gain state, media and public support.

Violence against women was an important rallying point for the women’s
movement in its early phase which ultimately led to the quest for legal reforms
by the women’s movement.

The efforts of this women’s movement had different foci at different points of
time in the history which include a preoccupation with protectionism during the
social reform movement, a quest for constitutional and formal equality during
struggle for independence and finally attack on patriarchy.

Rape:

The widespread campaign against Supreme Court judgment in the Mathura case
(during 1970-80) brought women’s issues on to public agenda and lobbied for a
change in the rape laws. The mass support obtained from public and media
during this protest made the women’s issues assume a political significance that
political parties could not ignore.

The major demands for legal reforms were:

• To shift onus of proof form the prosecution to the accused.

• During rape trial a woman’s sexual history should not be used as


evidence.

However, when the law was amended the latter was not incorporated and former
only partially accommodated cases of custodial rape.

One of the major flaws in the amendment was that the campaign had been
unable to dispel conservative assumptions about virginity and chastity.

Also there was a clause included in the amended law which made publishing
anything related to a rape trial an offence.

Dowry:

The anti-dowry agitation marked the feminist assertion of the personal as the
political through an activist agenda. This agitation focused attention of both
Indian and international media on the atrocities against women. It was driven by
an energy which in time was “transformed into a brand of activism which
asserted women’s agency in social change.” Some of the major events that took
place are as follows:

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• Women’s organizations vocalized that dowry was not an isolated


phenomenon, but was linked to the inferior status and position of women
in the society.

• Efforts were made to mobilize opinion in the concerned neighborhoods.

• The strategy which was extremely effective was social ostracism and
visible campaigning outside the house of the families that murdered their
daughter-in-law for dowry and were successful in marking them out as
murderers.

• Focused in many ways on effecting new legislation like increase in the


punishment, making the offence a non-bail able and shifting the burden of
proof on to the accused.

Sex Determination Tests:

Designed as a test to detect congenital abnormalities, the amniocentesis test


also revealed the sex of the child. These tests were very popular, largely for
reasons of sex determination and subsequent sex selective abortion of female
fetuses. Some interesting facts and incidents that came to light during the
extensive popularity and usage of these sex determination tests were:

• This amniocentesis test offered a way for the families with anti-girl-child
cultural attitudes to get rid of their girl children clinically if not ethically
even before they could be born.

• Forum against sex determination and sex-pre-selection (FASDSP) was


formed in 1984 with intent to campaign against the misuse of the
amniocentesis test. It conducted research and surveys and raised
awareness among public through workshops and seminars.

• This campaign had to be very careful to prevent their arguments end up


sounding like those of the anti-choice (anti-abortion) lobbies in the
western world.

• They had to counter arguments that suggested that the test would be a
useful means of population control.

• It pointed out that it was ironic to talk of choices for women whose
daughters were being killed for the crime of being female.

• Legally it was difficult to regulate post-amniocentesis abortion stringently


without affecting women’s right to abortion.

Sexual Harassment:

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The women’s movement had also highlighted the issue of sexual harassment.
This was addressed legally, though only in the context of the workplace, by
Supreme Court judgment of august 13, 1997.

• Employers are directed to take steps to prevent sexual harassment, take


disciplinary action against offenders, initiate legal action if required,
refrain from discriminating against those who lodge complaints, and
ensure that employees are aware of their rights.

• The judgment does not provide any impetus for women to come forward
and file sexual harassment suits.

• On one hand, there are women who are much poor to consider legal
action. On the other hand are professional women for whom the
description of professionalism as equality has come to mean the ability to
take what in a sexist work culture is indulgently viewed as ‘fun’ in their
stride.

Explaining Sixty Years of India’s Foreign Policy


Sumit Ganguly and Manjeet S. Pardesi

Summary by Om Prakash H

This paper talks about india’s foreign policy from 1947 till date.

It is divided into 3 sections:

• 1947 to 1962: Nehruvian Ideology.

• 1962 to 1991: self-help approach to foreign policy

• 1991 to present: foreign policy closer to the principles of Realism

Systematic, national and decision making factors shaped our foreign policies
choices.

This article argues that the policymakers chose to pursue an ideational foreign
policy that left india unprepared to cope with China’s threat, which led to border
war in 1962. Now india started to think of security.

During the period of Indian Independence, attention paid to our country by US &
soviet Union was very minimal. This helped India focus on creating foreign policy
without any external influence. The imperial rule of 200 years had convinced the
masses and the policy makers that, our foreign policy should make India, an
autonomic country, and this gave birth to the non alignment strategy, crafted by
Nehru.

2 main reasons caused Nehru to adopt the Non Alignment Movement:

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• The huge amount of defense spending that India would have had to incur,
had it supported either of the emerging blocs.

• His focus was to develop India, and not to waste the hard earned
independence.

The pathway to 1962

India’s foreign policy had 3 key characteristics, till the time of border conflict
with PRC:

1. Emerged as an important advocate of NAM

India aimed at diffusing cold wars, and also worked with Ireland to
propose a ban on nuclear tests globally, through a nuclear test ban
treaty.

2. Played a significant role in UN peacekeeping operations

India sought to play a key role in peaceful resolutions of regional


disputes. Became a member of International Control Commission in
Vietnam, key member of Neutral Nations Repatriations
Commissions in Korea, contributed troops to the UN peacekeeping
force in Belgian Congo.

3. Significant contribution towards the process of decolonization.

India’s NA led to placing a limit on the defense spending.

India and PRC pursued the policy of panchasheel:

1. Mutual respect for each other's territorial integrity and sovereignty

2. Mutual non-aggression

3. Mutual non-interference in each other's internal affairs

4. Equality and mutual benefit

5. Peaceful co-existence

India, though noticing PRC’s possible border related threat, did not do anything
significant, and when the border negotiations with PRC hit a dead-end, India tried
to guard its Himalayan border with light, poorly armed, ill prepared troops. PLA
claimed close to 14000 square miles, and it still remains a subject of border
negotiations.

The post-Nehru era

After the terrible military defeat, India’s foreign and security policies had a
remarkable change. Nehru overcame his removed limits on military spending.
India embarked on substantial military modernization. But NA was still a part of
India’s foreign policy.

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But things started to change after INDIRA GANDHI took over as PM. She
authorized subterranean nuclear explosions project to perform the first nuclear
test. India’s foreign policy now had 2 visions:

• Support the cause of decolonization

• Importance of military preparedness

After seeking protection of soviet union, india worked towards creating


Bangladesh, and eventually emerged as a dominant power within the
subcontinent. But india could nto be a global power, since economy wasn’t that
great, due to state-led industrialization, very little liking towards export, lack of
foreign investment, innovation, entrepreneurship.

India’s foreign policies underwent a major change when soviet union collapsed.
This caused the Non Alignment policy, obsolete. Also, the gulf war prompted
India to stock huge amounts of oil, around 100000 workers were sent back from
Persian gulf on a very short notice, and this also caused a major dent in the
Indian exchequer. These events placed india in dire financial situation.

So, manmohan singh liberalized the economy. India aimed at aligning itself
towards US. US, on the other hand, gave india little significance, especially
because of the NPT, which India did not want to sign. This may also have led to
minimal trade and investment with India. Also, both did not trust each other.

India now started to consider the Southeast Asia as a viable exports sector, and
to encourage them to invest in India. This is the “Look East” policy. It also
focused on the Southeast Asia to prevent it from being dominated by China.

PRC’s nuclear weapons, persistent disputes with Pakistan on Kashmir posed long-
term security threats to India. This forced India to go for Nuclear programs.

Finally, India was acknowledged as a nuclear weapons state globally. US began


to woo India.

Summarizing: Indian policy makers have managed to establish India as a


significant global player, though there are many economic development
challenges to be faced.

Indian Foreign and Security Policy: Beyond Nuclear


Weapons
Harsh Pant

Summary by Sriram C

It has been proven that Nuclear weapons are primarily political instruments and
not weapons of war. Given this understanding, and the fact that India has
concluded a landmark nuclear deal with the US ensuring nuclear autonomy, it is

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time for India to look beyond nuclear weapons and focus on broader issues as it
advances in the global hierarchy of nations.

ECONOMIC RISE

• Challenge is to maintain the rate of growth over the next few years. India
can continue to be as strong a military power in the future only if it
sustains the growth it has seen in the recent past. It is one of the largest
arms buyers in the world.

INSTITUTIONAL VOID

• There is no effective and central institution in the country that directs the
foreign/security policy and strategic thinking has often been ad hoc and
unclear. The National Security Council set up by the UPA has not lived up
to its goals of anticipating security threats, coordinating management of
national security and long term strategic planning.

• Failures during 1999 and 26/11 are examples of the lacklustre


intelligentsia.

• Nongovernmental think tanks and academics are largely absent in the


domain of strategic planning and foreign policy. Furthermore, the state
institutions are bogged down by the bureaucracy.

• Years of low investment in higher education and the flawed system of


funding all higher institutions to the same extent has worsened the
situation. Social sciences and humanities are not attractive enough to
retain talent anymore.

INTERNAL SECURITY

• India is facing a gradual collapse of authority as internal issues ranging


from left wing extremism (Naxals) to right wing religious fundamentalism.

• A target for Islamic fundamentalism since India is perceived to be a


natural ally of the US, Israel and more generally the west. Furthermore,
several internal wings of external terrorist organisations have started
operations that have shattered the myth that India is insulated from
Islamic fundamentalism from within.

• No institutional mechanisms for intelligence assessments and lack of


coordination between the National Security Advisor (NSA) and the various
intelligence agencies.

• India has not solved a single major case of terrorism in the last five years.
The Maoist movement has become India’s ‘greatest internal security
threat’ in the words of the PM, Dr. Manmohan Singh. Yet the government
has not come up with a credible policy to deal with such issues.

KASHMIR UNSETTLED

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• A large chunk of the population in Kashmir has taken to the gandhian way
of non violent protests for their demand of an independent Islamic state,
closely allied with Pakistan. To tackle this India may have to adopt
international approbation.

• India and Pakistan seemed like they were headed towards a solution for
quite some time till recently when Musharaff lost the mandate to do so.
Meanwhile Kashmir was peaceful until the spell broke over a minor land
issue raised by the hindu nationalist BJP.(The Amarnath land transfer
issue) This snowballed into the largest pro independence march since
1989 in the valley

• One thing is for certain: The international boundaries between India and
PoK cannot be redrawn.

GOVERNANCE WOES

• Governance is in a sorry state. It is ineffective, bureaucratic and a


paralyzed decision maker.

• Maladministration, dithering and incompetence have made all state


institutions ineffective.

• India is becoming a more corrupt nation by the day: The Corruption


Perception Index.

POWER BALANCE

• India’s ambivalent external policy has prevented it from harnessing the


benefits of its potential relationship with the US. India often clings to
obsolete ideology dating back to the NAM/third world solidarity days.

• All of India’s neighbours, barring China, have grave internal issues and are
inherently unstable nations. They resent India’s rising stature in the region
and in the world, as India is viewed with suspicion.

IDEAS MATTER

• India needs to assert what it stands for, globally. India’s rise to the very
top of the hierarchy has been based only on its economic robustness and
it needs to be clear as to what being a global power really means.

• If and when India becomes a member of the UN Security Council, it will


have to taka stand on several global issues and given the political system
in the country, it would be an extremely tough task to accomplish. Some
feel India is actually better off by not being a permanent member of the
UNSC.

• The Indo American deal signing process has shown that the polity is
gravely divided when it comes to foreign policy and strategic placement of

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the nations concerns. There are doubts as to whether India can actually
harness the economic and strategic opportunities to its advantage.

Developing India's Foreign Policy 'Software'


Daniel Markey

Summary by Rajeev Kumar

The article outlines significant shortcomings in India’s foreign policy institutions


that undermine the country’s capacity for ambitious and effective international
action, and proposes steps that both New Delhi and Washington should take,
assuming they aim to promote India’s rise as a great power. Some of Daniel’s
observations are worrisome but real.

Shortcomings:
India’s own foreign policy establishment hinders the country from achieving
great-power status for four main reasons:
(1) The Indian Foreign Service is small, hobbled by its selection process and
inadequate midcareer training, and tends not to make use of outside expertise;
(2) India’s think-tanks lack sufficient access to the information or resources
required to conduct high-quality, policy-relevant scholarship;
(3) India’s public universities are poorly funded, highly regulated, and fail to
provide world-class education in the social sciences and other fields related to
foreign policy; and
(4) India’s media and private firms—leaders in debating the country’s foreign
policy agenda—are not built to undertake sustained foreign policy research or
training.

India’s Foreign Policy Institutions and Expertise:


According to Daniel, today the Indian Foreign Service (IFS) remains
remarkably small. The Ministry of External Affairs (MEA) is one of India’s leanest
ministries in part because the MEA has no natural domestic constituency or
champion—unlike, for instance, the ministries governing railways or commerce
and industry. With fewer than eight hundred professional diplomats and an
annual budget of just over half a billion dollars in fiscal year (FY) 2006–07, the
service is stretched across 119 resident missions and 49 consulates around the
world. Daniel quotes a U.S. diplomat as stating that the IFS may be right-sized
for Malaysia but is certainly not for a country with India’s global aspirations. He

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further adds that the MEA’s in-house policy planning office is widely panned as
irrelevant, disconnected from serious policy concerns, and incapable of high
quality output. A large portion of MEA policy formulation and debate is
apparently conducted by in-person or phone conversations rather than through
careful written analysis, though this pattern may be changing.
India’s foreign policy think-tanks lack sufficient access to the information,
expertise, and resources required to conduct world-class, policy-relevant
scholarship. The Official Secrets Act, closed archives, and tight lipped
bureaucratic culture of MEA are largely responsible for inadequate flow of
information.
The following comment by a member of an Indian Think Tank is most scary, “I
can barely find a PhD from an Indian university capable of writing a single high-
quality page of English text.” The young talent is easily attracted to more
lucrative opportunities in the private sector.
India’s corporate sector has not fully embraced the peculiarly American model of
sponsoring independent research organizations and providing no-strings-
attached grants.
The extensive resources available to the private sector, industry groups such as
CII, and the media have turned these groups into leaders in articulating and
debating India’s foreign policy agenda. Yet it should come as no surprise that the
incentive structures within these organizations are geared toward short-term,
profitable, or high-profile agendas. These groups are not built to undertake
sustained policy research or training and should not be expected to fill gaps left
by government, think-tanks, or universities, even if appearing at a superficial
level to provide similar services.
Policy Implications:
Daniel further compares India’s recruitment and policy making process in the
foreign services with that of China to highlight remarkable differences. In the
author’s analysis for India to achieve great-power status, a number of
improvements to its foreign policy software will be required:

• expand, reform, pay, and train the Indian Foreign Service to attract and
retain high caliber officers
• encourage the growth of world-class social science research and teaching
schools in India through partnerships with private Indian and U.S.
investors, universities, and foundations

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• invest in Indian think-tanks and U.S.-India exchange programs that build


capacity for foreign policy research
• bring non-career officers into the Indian Ministry of External Affairs and
other parts of the foreign policy establishment as term-limited fellows to
improve outside understanding of the policy process
• support the efforts of Indian researchers to maximize public access to
material related to the history of India’s foreign policy by way of the 2005
Right to Information Act.

Contemporary comparison of foreign policy of India with China

China’s Ministry of foreign affairs (MFA) has a relatively more targeted


recruitment, extensive and ongoing training, and competitive promotion path
compared to India’s Ministry of External Affairs (MEA). Due to which China has
been able to build much better Foreign Service personnel in comparison with
India.

China has successfully promoted universities concentrating on foreign policy.


Some of its universities have prominently figured in the worldwide university
rating whereas India has lagged behind in promoting its universities
concentrating on foreign policy.

Historical comparison of foreign policy of India with US

US had gained significant economic clout by the end of nineteenth century. Post
World War-II, US concentrated on foreign policy development and has since then
implemented a number of foreign policies and has gained influence in different
regions of the world. The author suggests that India should also follow a similar
policy as US if it intends to become a global power in years to come.

Future of India’s foreign Policy

Some of the characters of Indian current Indian foreign policy is listed below:

1. Business-first:
If all foreign policies are influenced by business interests, then it can lead
to sidelining of other issues in foreign policy. According to author this
might force the Indian business to look more towards east and hamper the
India-US relations in the future.

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2. Regional:

Due to India’s troubled neighbourhood – Pakistan, Sri Lanka, Bangladesh,


Nepal and Burma, India might spend more time concentrating Sub-
continental foreign policies thereby distracting India from global
aspirations in future.

3. Reactive:

If India continues to maintain a lean foreign policy apparatus which is


currently in place in future as well. Then its policy decisions towards world
crises , particularly those demanding humanitarian or military
intervention, will be influenced by foreign countries rather than its own
interests.

4. One-Track:

Currently India has very few staff and resources in Ministry of External
affairs (MEA) compared to other countries due to which India is able to
implement single policy at a time instead of implementing multiple
policies at the same time. If this continues then it might be detrimental to
India’s global aspirations.

To overcome the problems listed above, the author suggests the


following steps:

1. India should increase the intake of India Foreign Services (IFS) and also
have a separate exam from IFS.

2. India should recruit mid-level bureaucrats into IFS so that there is


proper ratio between mid level and entry level officers IFS.

3. India should encourage its Social Universities to tie up with US


Universities so that it can lead to higher quality of education in the
Universities.

4. India is very conservative of releasing Government foreign Policy and


National security for Public use. Unless it is able to do so, It will not

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encourage research in these fields. This will result in stagnation of


foreign policy development.

The Clash of Civilizations


Samuel Huntington

Summary by Sunidhi Gupta

In future, the sources of conflicts are going to be cultural.

Earlier, they have been in the West mostly and have evolved from conflicts of
kings to nations to ideologies.

Civilization – cultural entity, highest cultural grouping of people and broadest


level of cultural identity people have.

Why will civilizations clash ?

1. Differences on the basis of history, language, culture, tradition, etc

2. Increased awareness of of differences and commonalities between


civilizations

3. The process of economic modernization and social change throughout


the world are separating people from longstanding local identities.

4. Role of west – non west nations form clusters. Eg. Asianization of Japan,
Hinduization of India

5. People can be segregated easily on the basis of culture.

6. Economic regionalism is increasing. Proportion of total trade that are


intra-regional is on the rise.

The clash of civilizations occurs at two levels


The micro-level : adjacent groups along the fault lines struggle often violently
The macro-level: states from different civilizations compete to promote their
particular political and regional values.

The fault lines between civilizations


Differences between civilizations are replacing political and ideological
boundaries.
1. Clash between Islam and the West
2. B/w Muslim and Hindu groups in India

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Civilizations Rallying
The Kin-Country Syndrome: Groups or States belonging to one civilization that
become involved in a war with people from a different civilization try and rally
support from other members of their own civilization. Eg:
1. Iraq getting support of the Arab nations, with the Arab nations looking
down upon the American supported Saudi Arabia and Kuwait during the
first Gulf War.
2. Conflicts in the former soviet union
3. Fighting in former Yugoslavia

The West vs. The Rest


West is at the peak of power. UN, IMF represent its interests.
Differences b/w West and Non west
1. Culture – values, beliefs
2. Power and struggle for power ( military, institutional, economic)
3. Western ideas of individualism, liberalism, equality, liberty, free market
donot resonate with the non west.
4. Western idea of ‘ universal civilization’ at odds with others.

Responses to the west


• A course of isolation: opt out of participation like north Korea.
• Band-Wagoning: a attempt to join the west and accept its values and
institutions.
• Balance the west by developing cooperation with other non-Western
societies.

The Torn Countries:


1. Countries with large number of people of different civilizations eg.
1. Turkey
2. Mexico
3. Russia
2. A torn country must meet three requirements to redefine its cultural
identity
1. Its political and economic elite has to be supportive and
enthusiastic of the move
2. The public has to accept the redefinition

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3. The dominant groups in the recipient civilization have to be willing


to embrace the convert.

The Confucian-Islamic Connection


Focuses largely on weapon development programs- nuclear, chemical and
biological; and their transfer both material, research, technology wise to one
another.
• West tries to make policies to prevent non west from getting nuclear weapons
but non west asserts its right to acquire and deploy them for their security.
• China’s military power and its means to create such power. China provoking a
multilateral regional arms race in the east by exporting arms to Libya and
Iraq

Implications for the West


Implications on the Western Policies:

1. Short Term Advantage: promote greater cooperation and unity between its
own civilization – Europe and North American components; incorporate its
culture in the European and Latin American civilizations; better relations with
Russia and Japan to name a few.

2. Long Term Accommodation: needs to accommodate non-western modern


civilizations whose power approaches that of the West but whose values and
interest differ significantly from the West. Requires the west to develop a
more profound understanding of the basic religious and philosophical
assumptions underlying other civilizations.

It’s a Flat World After All


Thomas Friedman

Summary by Ram Sevak

The article is an excerpt from the now-famous best-seller “The World is Flat: A
Brief History of the Twenty-First Century”. The author visited India in 2005 and in
the opening paragraphs of the article he compares and contrasts his journey to

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the one made by Columbus ~512 years earlier. While Columbus concluded that
the world is round, the author paradoxically finds that the world is flat!

• Outsourcing is just one dimension of a more fundamental thing. There


has been massive investment in technology in the bubble era in broadband
connectivity, undersea cables etc. Computers got cheaper, arrival of email
software and search engines like Google made remote development possible
(Nilekani)

• Intellectual work and capital could be disaggregated, delivered ,


distributed, produced and put back together giving a whole new degree of
freedom to work.

• Three phases of globalization: I) (1492-1800) – countries globalized for


resources and imperialism. II) (1800-2000) companies globalized for market and
labor. III) (2000+) individuals and small groups globalizing. Unlike first 2 phases,
globalization to be driven by non-West.

• Knowledge pools around the world being connected. Downside: Al


Qaeda and Hackers. Upside: On the edge of international knowledge revolution

• How world got flattened?---the flatteners creating collaborative platform


were:

o Nov 9, 1989- Berlin Wall went down. Breakthrough of Windows 3.0


flattened playing field thru creation of global computer interface.

o Aug 9, 1985 – Netscape went public, triggered dotcom boom.


Overinvestment in underground fiber n/w reduced transmission costs. Now India
and China had all the connectivity required.

o Workflow- software applications and middleware connecting the


computers.

• Six more flatteners created by above were: outsourcing, off-shoring,


open sourcing, in-sourcing, supply chaining, informing. 10th flattener called
steroids would be VOIP charging up all the other new forms of collaboration. All
this converged around 2000, creating Web enabled playing field for collaboration
in work etc.

• Value being created through horizontal collaboration within and


between companies.

• Carly Fiorina former HP CEO says – ‘..last 25 years a warm-up act for
main event.. era of.. technological transformation in business, government,
society..’

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• Economies of China, India, Russia and Eastern Europe opened up in 90s


at right time. They could directly adopt new technology as there were no ‘sunken
costs’ of old tech which were faced by now-developed countries.

• Countries like China going from ‘sold in China’ to ‘dreamed in China’


paradigm.

• Rajesh Rao, an entrepreneur from Bangalore, claims India mustn’t


relax. Jobs will go where there is least resistance and most opportunity. India was
able to make max use of new infrastructure.

• Americans must now figure out what to do and rise to the challenge.
They are not doing enough to enhance natural competitiveness. Challenge has
shifted from extreme Communism in Russia to extreme capitalism in India and
China. This has to be met with comprehensive, energetic and focused response
as Communism.

• Shirley Jackson, the President of American Association for the


Advancement of Science, calls this ‘quiet crisis’ –one that’s eating away at US
scientific and engineering base.

• America’s strength had been constant innovation till now. Quiet Crisis is
a result of three gaps plaguing US society: a) ambition gap b) numbers gap (due
to not producing enough engineers and scientists compared to India or China,
and no more importing from India and China after 9/11. c) education gap (in
terms of quality and productivity. The author ends that article with the
conclusion that America is facing a crisis that won’t remain long and it is now up
to the leadership to utilize the crisis constructively to maintain long-term viability
of the US standards of living.

Corporations: Predatory or Beneficial?


Jagdish Bhagwati

Summary by Arun Ramakrishnan

The article summarizes the behavior of multinational corporations (MNCs) in


developing countries in light of the major criticisms leveled against them by their
critics and concludes that 1) MNCs are by and large beneficial for developing
countries when they operate in the framework of existing laws (either defined by
the countries that they operate in or when the MNCs are subject to worldwide
laws) but 2) MNCs can be detrimental to developing countries when they are
allowed the liberty to frame their own laws.

The two major criticisms leveled against MNCs are:

• They do not enter countries that truly need injections of capital

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• They exploit the population of the (developing) countries in which they


operate

Bhagwati dismisses the first criticism by pointing out that it is the


responsibility of the ruling political class in a country to make the country
suitable for foreign investment. MNCs shouldn’t be saddled with the
responsibility of germinating the seeds of economic prosperity in volatile/ rogue
countries. Bhagwati suggests that this responsibility could be taken up by
organizations such as the World Bank, which could reduce its aid to countries
that can survive on their own and re-direct this aid to rogue countries.

The more serious criticism against MNCs is that they exploit the laws and
regulations of developing countries in which they operate to maximize their
profit. The following examples are offered to bolster this contention:

1. Developing countries offer so many incentives to attract MNCs to their


countries that they wind up as net losers (e.g., offering generous tax
concessions to MNCs, accepting terms that are detrimental to their economy
– such as agreeing to buy imports from donors at prices that exceed those
that would be paid if developing countries were allowed to import from the
cheapest sources)
2. MNCs are richer than most countries (14 of the top 50 economies of the world
are MNCs), so they wield enormous power (case in point: Enron ripping India
off) and have monopoly power
3. Large MNCs can bribe rules, bureaucrats, and politicians in poor countries into
creating artificially excessive profits at the social expense of the country
4. MNCs have ruthlessly eliminated opposition to their plans in foreign countries
(e.g., US in Chile and Iran, Belgium in Congo) and can do this again
5. Example: Royal Dutch/ Shell was castigated on drawing on the draconian
muscle of the Nigerian government to put down protests that the Nigerian
govt was siphoning oil reserves for use outside Ogoniland (where Shell was
based) and that Shell was damaging the local environment. The protestors
had resorted to seizures of Shell property and abduction of officials.
6. MNCs exploit the workers in poor countries by paying them extremely low
wages as compared to the final cost of the product
7. MNCs pay workers wagers that are what they can get in alternative
occupations in their native country
8. MNCs violate labor laws by operating “sweatshops.” MNCs should boycott
countries that operate sweatshops.
9. MNCs freely violate international labour laws by not adhering to basic human
rights
10.MNCs place restraints on unions so that workers can’t demand better working
conditions

Bhagwati counters these with the following arguments:

1. It is not that MNCs pay zero taxes – some taxes are paid, and the benefits of
employment of the unemployed and occasional diffusion of technical know-

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how and better management practices from the MNCs to the developing
countries more than offset the loss of revenue from tax concessions
2. The MNC > countries mathematics is based on comparing the sales volumes
of MNCs with the GDP (value-addition in all activities) of countries, which is an
unfair comparison. If one were to look at the value addition of MNCs vs.
countries, one would find that only 2 of the top 50 economies were MNCs.
The Enron situation was invited by India which did not ask Enron to compete
with other firms for the Dabhol tender. MNCs do not have monopoly power
since countries can pit MNCs desirous of entering their country against each
other.
3. Evidence for #3 is hard to find, and this is becoming more and more difficult
to do as governance had become a concern of many aid agencies and recent
agreements have forced MNCs to be more transparent with their dealings
4. It is highly improbable for MNCs to repeat their activities of the pre-globalized
and pre-internet world without being caught and being universally censured.
In fact, a new criticism of MNCs is that they don’t meddle enough in the
affairs of the countries that they operate in
5. Shell shouldn’t be held responsible for the policies of the Nigerian govt. Also,
seizure of equipment and abduction of officials isn’t the right way to protest –
the protestors could have resorted to non-violent means. Bhagwati concedes
that if the Nigerian govt. did not have any environmental policy and that Shell
was making use of this loophole to remorselessly pollute, then the protestors
had a moral case against Shell.
6. No correlation between the wages given to workers and the final price of the
product. Also, a study of the profit performance of 214 companies showed
that profit made by firms was 6.6% on foreign assets, so MNCs weren’t
making huge profits that they can share with the labourers
7. Studies by Linda Lim of the Univ. of Michigan in Bangladesh, Mexico,
Shanghai, Indonesia, and Vietnam show the opposite result – that
multinationals pay a “wage premium” – an average wage that exceeds the
going rate, mostly up to 10%, with affiliates of US MNC paying a premium
ranging from 40-100%. If jobs are subcontracted to local companies, this
premium is possibly negligible.
8. Sweatshops are typically small-scale workshops and not MNCs – they are
most probably run by subcontractors of MNCs. But this is a problem of lack of
enforcement in the host country. Most developing countries have generous
labour laws but no enforcement because the laws were never meant to be
enforced in the first place (they’re just there for the “feel good” factor)
If a country indulges in sweatshop practice, then that country should be
declared a pariah by the WTO and the ban should apply to everyone, not only
to the MNC. Just asking the MNC to not deal with the offending country is
unfair.

9. In cases of domestic laws being less demanding that international law (say in
case of number of working hours per week), most workers in developing
countries voluntarily work excessive hours since they can make more money
– the MNC isn’t forcing them to do so. Also, international laws are quite
broadly stated and are hard to follow, as opposed to domestic law which is
narrow in definition
10.Reality is the opposite – governments have strict rules against unionizing in
SEZs and EPZs because they know that workers will not work/ will shirk work/
draw free salaries if they are allowed to unionize

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Bhagwati contends that the policy followed by an MNC in a developing


country depends on the domestic policies of that country. For example, in the
50s-60s, most developing countries did not allow MNCs to flood their countries
with products – they imposed high tariffs/ import substitution (IS) on the MNCs
products. If the MNCs wanted to sell in that country, then they had to be based
there. Once the MNC was established in that country, it found that the cost of its
raw materials was very high (due to tariffs), so it resorted to very little
production in the host country – it made most of its product elsewhere and
imported the “almost final” version of the product to the home country, added
finishing touches, and sold it there. Countries such as Taiwan, Singapore, and
Hong Kong then adopted an export-promoting (EP) models, and their economies
flourished as MNCs set up large production facilities, increased employment, and
created export-driven growth.

One important benefit of the presence of MNCs is “spillover” - diffusion of


technical know-how and better management practices from the MNCs to the
developing countries. Studies show that growth of domestic firms was higher in
the presence of MNCs.

So the contention that MNCs are bad for developing countries is unfounded.

Addition of TRIPs (trade-related aspects of intellectual-property rights) to WTO:

This is one area in which MNCs have overstepped their privileges.


Pharmaceutical and software firms have muscled their way into the WTO and
turned it into a royalty-collection agency because the WTO has the right to apply
trade sanctions. Examples-

• Any country that did not extend IPP (intellectual property protection) to US
companies was subject to tariff retaliation for an “unreasonable” practice
• Patent periods were lengthened to 20 years
• Restrictions were placed on poor countries such as Botswana against
importing “generic” drugs from countries such as India and Brazil

These are unreasonable practices because:

• Poor countries can’t pay the high costs of drugs anyway – they have need but
little effective demand
• MNCs make two types of drugs – those for diseases primarily in developing
countries (malaria, TB) and those for diseases in both rich and poor countries
(AIDS). The former drugs (for which poor countries can’t pay) are financed by
public grants/ charitable foundations and the latter drugs are something for
which MNCs value IPP (since the rich countries can pay). MNCs can produce
more of the latter drugs for poor countries at very little marginal cost, but
they’re trying to maximize their return by making developing countries pay
through their noses. MNCs also try to raise the effective demand for their
drugs in developing countries by lobbying other countries to offer aid to
developing countries so that they can afford the MNC’s drugs.

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Where MNC lobbying has produced harm:

• Promoting bad goods: The FDA (Food and Drug Administration) in the US bans
certain drugs in America but doesn’t ban their export by US companies/
producers of the offending drugs to other countries
• Bads here but goods there: DDT has been banned in the developed world, but
it’s good for the developing world
• Goods here but bads there: Marketing baby milk powder in countries where
mother’s milk builds immunity in children (and milk powder does not). Also,
water is the countries in which this milk powder was contaminated, leading to
several deaths of infants
• Ambiguous goods (lethal but legal): Cigarette MNCs managed to overturn
Thai entry restrictions for their products although Thai officials argued that
MNCs were in a much better position to penetrate the Thai market (which did
not include children and women) due to their better marketing and
distribution skills

Corporate social responsibility:

MNCs will benefit if they adopt three approaches to CSR to “offset” any harm
that they do:

• Social norming: Signing on to a global treaty such as the UN’s Global


Compact, which consist of widely shared and internationally affirmed social
values (although stated broadly and have no monitoring, certification, or
enforcement mechanisms)
• Voluntary codes: Having specific obligations and monitoring, certification, and
enforcement mechanisms
• Mandatory codes: National mandatory codes have been proposed to
complement the Global Compact and the voluntary codes. Bhagwati believes
that instead of creating a “universal” code that all countries need to adhere
to, it is better that this code takes shape through an evolutionary process –
starting with national codes and converge over time to a universal set of good
practices.

Summary by Kritika Kashyap

Part I:

A critique on MNCs

Arguments against MNCs Arguments for MNCs

1. Accentuating divide between Making Profits is the primary motive


fortunate and poor countries: of business. If a country wants to
bypass countries that need them attract investment, it has to provide
the right environment- like political
stability, economic benefits like cheap

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labour and exploitable natural


resources

2. Hans Singer: Multinationals have no Today MNCs are mostly into


influence on the host countries, manufacturing and financial services
good or bad. Eg: extractive that attract investment from the
industries like diamond and bauxite environment

3. Poor countries competing amongst MNCs bring in benefits, like


themselves to give bigger tax breaks employment, diffusion of technical
to attract foreign investment wind know-how and best management
up as net losers. practices as well as direct investment
that outweigh tax breaks and rent
free use of public land.

4. MNCs further improve their MNCs contribute to a more orderly


bargaining power by asking for and efficient allocation of world’s
mandatory provisions (eg: proposed scarce investible resources.
by EU at WTO) to prevent receiving
countries from imposing restrictions.

5. Large companies, Small countries

Role of corporations in small a) India had failed to invite tenders


countries is exaggerated since sales from other potential investors in a
figures exceed the value added to rush to get energy investments.
Large firms will not have monopoly
the GDP of a country.
power in small countries if effective
competition can be provided. Smart
nations play MNCs from one
a) Fears of corporate rip- offs country against those from others.
(eg.Enron taking India for a ride
before it self destructed).

b) Recent laws for governance


b) Big corporations can bribe requiring disclosure of royalty
politicians, bureaucrats in small payments to govts. Are a subject of
countries into creating excessive concern for MNCs and action by the
profits at the expense of the host aid agencies
country.

6. MNCs intruding into host country’s Intervention of MNCs in politics is


political space: highly improbable today since:

Eg 1: leading MNC’s in Chile (Pepsi a) Democracy in underdeveloped


and ITT) are known to have played a countries allows political abuses to
role in a coup against the elected come to light because of the
freedom given to NGOs and
president Salvador Allende of Chile,
individuals to point fingers at the
who began to shift to the left offending corporation
towards his policies on FIIs and b) More coverage of the accusation
MNC’s. though TV and internet, reduces

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the moral standing of the foreign


multinationals and govts.
Eg 2: Belgian corporation installed a
puppet after the over throw and
assassination of the 1st elected MNCs are also accused of neglect in
president of Congo, Patrice domestic politics
Lumumba in 1960.
Eg: Royal Dutch/ Shell was accused
by NGOs for abuses by the
enforcements of the Nigerian Govt.
Eg 3: Iranian PM Mohammad used to turn down protests against
Mossadegh overthrown by CIA partly the Co.
because of the interests of the giant
oil cos. In the region. The protest was against the Govt.
policy of redirecting oil revenues
outside their region.

Shell obviously had no choice but to


use the state’s enforcements to
protect the Co’s property and
personnel against seizure from
protestors.

Also the Co. was blamed for


damaging the local environment
when the Nigerian Govt. had no
environment policies

7. Exploitation of workers in poor countries.

a) MNCs are solely driven by profits, • Creation of job opportunities by


inspite of having deep pockets, pay MNCs in poor countries should be
“unfair” or ”inadequate” or low applauded. Even locals are happy
wages. with the new jobs created.

• There is no direct relationship


between the price of product and
the wages because
(a) the probability of failed product
increases, reducing the effective cost
of each product

(b) additional tariffs and distribution


costs add to the price of the final
product

• MNCs pay wages better than that


given by local companies or in other
jobs. Some give a “wage

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premium” exceeding the going rate


by up to 10%, and in some cases of
US affiliates, by 40- 100%.

• The company could be expected to


share the “excess” profits if it were
earning monopoly profits and paying
competitive wages; but these
companies are working in highly
competitive markets.

• By increasing demand for


labour, the MNCs are only likely to
increase the overall wages in the
country.
b) MNCs run sweat-shops in poor Sweat-shops are small scale
countries, not paying living wages workshops of local subcontractors
and violating labour rights. that supply to the MNCs and are not
owned by MNCs themselves. Why
Safety and working conditions. would MNCs boycott anything that
has been produced legally as per the
host country’s laws?

How can the MNC ensure


enforcement of local labour laws?
What resources should be spent on it?
Especially when the local legislation
itself doesn’t intend to enforce these
laws because of the high costs of
such mandates.

c) Work conditions might not violate Western oriented International laws


domestic laws but still violate may not make sense in the poorer
customary international labour laws. countries where for example workers
might volunteer to work for long
hours to earn more, which cannot be
called exploitation.

Eg: Restraint on union rights is a


violation of customary international
law, but has been enforced in
EPZs(export processing zones) by
Govts. since these unions enjoy rights
and accept no obligations. In India,
union rights are maintained in EPZs,

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but wild- cat strikes are not allowed


given that export industries are
“essential” industries

Customary international laws are


broadly stated and can be defined in
many ways, unlike legislation and
executive orders which are clear to
follow. Which definition should the
MNC follow?

Recommendations by the author:

1. Altruistic institutions like the World Bank should lend to the countries that
donot have the resources to make it own their own (instead of countries
like India and China). The solution is to redirect funds and technical know-
how to these countries since they don’t get them though private
corporations

2. We need to assert the broad aspirational objectives on labour laws like the
ILO Declaration of Fundamental Principles and Rights at Work by which
many nations have agreed to the following:

• Freedom of association and the effective recognition of the right to


collective bargaining.

• The elimination of all forms of forced or compulsory labour

• The effective abolition of child labour

• The elimination of discrimination in respect of employment and


occupation.

However, for purposes of assessment, we need to arrive at much narrower


and realistic agreements on specific practices eg: minimum safety
provisions (OSHA standards are too expensive to be met by poor
countries). The present subjective interpretations can imperil the flow of
international investment by adding the risk of expensive litigation by
activists and NGOs peddling their preferred interpretation on a core right.

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Serviced From India : The Making of India's Global Youth


A.R. Vasavi

Summary by Sujoy Kanti Dutta

The article deals with the Work and Workers in India’s IT Industry. The
article describes how Indian Youth are becoming part of the ITES
industry.
1) Emerging Global Youth of 21st Century (different culture than
older generations)
2) Tapping the pool of “available “ youth (English speaking +
trainable=easily deployable)
3) Selling Jobs tailored for youth
4) New Opportunities , New Life : Youth access ITES
5) Training as Inculcation of New Dispositions
6) Education , Employment and Entertainment – ITES Work as
Lifestyle
7) ITES Youth are Transnational Information Service Subject
Summary Supporting quotes and (or) examples
New youth ITES employees can be easily In shopping malls , wearing ID cards ,
identified . queue in ATMs
Part of Global High Tech. Work and Global They constitute category of worker-
Consumer Industry consumers.
Emergence of new adolescences & Engagement with hegemonic global media
adulthoods & Consumer culture
Beginning of 21st century is a period of ITES employees use ICT extensively ; Indian
intense fragmentation and disjunction Youth is the single biggest source of labour
ITES means Call Centre + BPO + Back
Office (non voice) + tech support + India is back office of the world. Indian ITEs
telemarketing . cater to US , UK , Australia
Problem of unemployment of educated GOI has earmarked ITEs as a prime
youth is solved to some extent industry. ITEs declared as essential service.
‘Serviced from India’ analogous to ‘ Made Large pool of trainable labour. 440,000
in India’ engineers. Absorb into ITES workforce.
Largest Pool of Unemployed Youth from Non-English speaking – ITES cannot help
RURAL areas them at all.
Consultants , desk engineers - lucrative
designations , in reality they are routine &
Advertisements for jobs are misleading stressful repetitive work
Job Fairs , Walk Ins , recruit in huge
Selling Jobs to the Youth numbers .
Basic degree , still good pay – Freedom + Earn while learning – Youths get
independence attracted
High salaries + not dependent on parents –
new lifestyle at young age , compared to
Consumption oriented life styles other jobs
Intense Training is needed. Many workshops and modules , accent
learning , Training negates cultural origin ,
internalise the rules and procedures of ITES

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industry.
9 hours / day huge stress : So ITES try to College like atmosphere , posters , Fun
represent work as LIFESTYLE rather than Officer conducts games , Casual Clothing –
labour. no formals.
Outings to Bowling Alleys ,Prizes such as Strategy to compensate and lessen
DVD players Monotony of the work.
New and Westernised lifestyle for ITES Smoking , Drinking , financial independence
youth , outside authority of parent
Industry uses skills of the youth ; Youth
Transnational Governmentality draw economic benefits
Not as workers ; but as Subjects who
ITES workers craft themselves as objectively & subjectively subscribe to the
professionals , visible consumers. logistics of the industry.
Middle class Youth – The ITES job is Issues of work identity and rights remain
transient & transitory unaddressed
ITES work is emblematic of global high tech Workers becoming subjectified as carriers
service work. of economy and consumer culture
Inference : ITES Youth are workers , without identity as workers .Still
Youth are enticed into the industry – it’s a job for them not a long term
career.

Labour and Globalization


Supriya RoyChowdhury

Summary by Devi Prakash

There have been a number of ways in which economic liberalization reforms


have impacted the industrial economy, but the impact on labour has not really
been discussed much

Economic reform leaders have two basic assumptions about labour:

1. Within the framework of trickle down growth, labour will automatically be


taken care of

2. The resistance to reforms by labour class can and should be handled by


coercion, persuasion and consensus.

Governments are not ready to publicly confront that economic reforms can
increase hardships and inequalities for labour.

Globalization’s and marketization’s negative impact on labour:

• Decline in the organized workforce.

• Weakening trade unions

• Political vacuum in terms of agencies which would advocate labour rights

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Though there is a large research on negative impacts of globalization etc , but no


alternative policies to marketization are put forward!

Labour and Globalization in India and State’s relationship to Labour:

• Pre-reform era:

o Even then organized labour constituted very small percentage of


the laboring class

o State was bound to this organized sector by a plethora of laws and


institutions

o Which guaranteed organized labor’s rights to job security, regular


wage revisions, retirements and other benefits

o Vast unorganized sector was unprotected in these terms

The article describes how with the current economic policy framework which
focuses on greater measure of integration with markets, the labour has been
impacted in terms of

• Shrinking of organized sector

• Inadequacy of social security nets

• Increased informal labour

• Changing dynamics of trade union functioning

Shrinking of Organized Sector

Organized sector definition - all public sector and all private non agricultural
establishments employing ten or more workers.

Facts –

• Share of registered sector in total manufacturing employment fell from


about 30% in 1977 to 23% a decade later

• Share of informal segment in workforce increased from 72.8% in 1972 to


82% in 1993

One reason attributed to the shrinkage: Rise in real wages as well as rigidities in
the labour market resulting from policies that prevent market dictated hiring and
firing led employers to freeze hiring and to move towards capital intensive
technologies!

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However this reason has been refuted by many scholars on the grounds that real
wages have not increased proportionally to per capita income growth and in
actual terms there has been a decline in power of trade unions. They attribute
the shrinkage to increased competition due to liberalization that has forced firms
to cut labour costs. Liberalization has created environment for cutting down
salaried jobs through

• VRS

• Contractual employment

• Subcontracting

• Outsourcing et cetera

Expansion of the Informal Sector

Definition of Informal Sector –

• men and women who eke out a living but unprotected by a regular salary
and job security

• the self employed,

• daily wage laborers

• salaried employees who do not have a job security, wage revisions and
other benefits

Problems of informal sector workers:

• low wages

• insecurity of jobs

• long and unregulated hours of work

• absence of accident and other insurance

• abysmal living conditions

Examples quoted in text:

1. Gujarat

• Unprecedented developmental achievements and growth of tertiary


sector

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• Informalization of around 3 lakh persons on account of erosion of


Gujarat’s largest and oldest industry- textile industry which led to an
increase in percentage of people living in slum areas from 23 to 41%

2. Karnataka

• Growth rate of more than 8% in the second half of 1990s; the third
largest recipient of FDI; IT and Bio-Tech advancements and presence of
large number of multinationals; India’s Silicon valley

• Stagnation in employment in organized sector and growth of


employment. As high as 71% people in informal sector in
manufacturing and large number of closures in Small Scale Industry
Sector; exponential growth of slums

Inadequacy of Social Security Nets

Reduction in public sector employment affected mostly manufacturing sector


and this reduction has taken place gradually, mediated by VRS and consent of
trade unions, rather than coercively. In the private sector, profit making firms
have rationalized labor through attractive compensation packages, and in the
declining firms, workers are displaced overnight illegally without getting any
severance compensation.

Public spending has shown no responsiveness to plight of informal sector.


Schemes like National renewal Fund (designed primarily to fund the retraining
and redeployment of displaced workers) inefficiently used. Social sector
expenditure declined in 1990s as compared to 1980s

Weakening of Trade Unions

• Decline of unions in era of globalization both in terms of numerical


strength and bargaining leverage

• Growing distance between leftist parties on one hand and their traditional
labour constituencies and trade unions on the other

• Unions getting weakened due to increased number of contractual laborers


available to companies

• In times of financial crunch, when PSUs force trade unions to choose


between VRS and privatization/closure, they have no option but to agree
to go for VRS

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Handout Summary Business, Government and Society

Imaginary Cities
Dunu Roy

Summary by Mayank

There are several questions about the nature of “planning” itself. Who makes
these plans? Who are they made for? Do the planners take into account actual
data from the study of how cities grow? Or do they plan what they think cities
should be like, asks Dunu Roy.

Combat Law (Sept – Oct 2003) – It is a landmark judgement that held that the
Right to Life included the Right to Livelihood.

City Planning Trends

• Large sections of the urban poor habitation have been forcefully taken over
by every government – regardless of political affiliations. (Largely Slums/Informal
Sectors communities in the cities)

• The occupational space that they occupied is being transferred into larger
private corporate entities such as commercial complexes and residential layouts.

• While the driving force behind these changes is manifestly the new
globalised economy, it is offered on an environmental platter of “cleanliness”
and “beautification”.

In vicious combination these three trends are changing the urban landscape as
“homes” to “estate ownerships” in the name of LPG (Liberalisation, Privatisation
and Globalisation). The chorus of the “resurgence” may conceal ugly face for a
while or keep away from gaze of the byte-hungry media, but the truth speaks
through many forms, many eyes, and many pains.

If today the presiding juridical deities are unwilling to play midwife, then there
are other conceptions, other weanings – indeed, other worlds! Because city
planners do not make cities, they only imagine them!

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Bangalore: Urban Lessons


BATF Team

Summary by Hemant Agarwal

By 2050 over 50% of India’s population will be living in urban areas. The cities in
India are ill prepared to cater to the basic needs of its citizens.

This article is a very general brief of some efforts made in Bangalore with the
assistance of the government.

The Bangalore experience has 4 distinctive components:

Bangalore Agenda Task Force (BATF) (end 1999, 15 members)

It is a state empowered task force for supply side improvements in government


bodies impacting quality of life in the city. BATF worked with 7 civic stakeholders
acting as a catalyst and aiding the implementation of plans whenever desired. It
also took up some projects on its own to build some credibility.

One major achievement was to bring key civic agencies under a common forum
and coordinate their activities towards a common goal. It provided the tools for
accountability and efficiency in the civic agencies. They ensured continuity in the
efforts of civic agencies irrespective of changes at senior levels

Janagraaha

A platform for citizens to engage with local government providing a space for
citizen demands to be met through collaborative citizen government
participation. Constructive Engagement: citizens can be informed and
responsible partners in the decision-making process.

PROOF (Public Record of Operations and Finance)

Deepens the concept of RTI to systematic “disclosure” mechanisms and


provides unique information dissemination mechanisms. It is promoted by 5
partners, one of them being Janagraaha.

eGovernments Foundation (Feb 2003)

It is a non-profit trust whose mission is to provide an eGovernance software


platform for use in corporations and municipalities across India for free. It
advocates systematic re-structuring of Municipal Governance through IT and
process reengineering

Local governments can become financially independent of the state government


if property tax reforms and other taxation are efficiently implemented and used.
The use of technology and more participation from the citizens can be very
useful in promoting the development of any city.

Among the contributors to these programs is Nandan Nilikani.

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Handout Summary Business, Government and Society

The Rise of the Creative Class


Richard Florida

Summary by Shrikanth Rangineni

Richard Florida is a professor in Carnegie Mellon, and through this article


explains why cities need to cater to the creative class

A student rock star recruited by Trilogy – to have diversity in the company

Company taking extra pains to retain creative people in their company

Author asks -

Why do young people prefer other cities over Pittsburgh?

Why are the Cities not following the Companies and trying to retain
creative people?

Creative Index

Author uses a creative index which is a measure of a region's underlying creative


capabilities. It has following components (with equal weights)

• The creative class share of the workforce


• High-tech industry, using the Milken Institute's widely accepted Tech Pole
Index
• Innovation, measured as patents per capita
• Diversity, measured by the Gay Index, a reasonable proxy for an area's
openness to different kinds of people and ideas

Current Situation

 The creative people have started concentrating in some cities and regions
which have adapted to their needs
 Creative people get paid twice the average salary
 As a result regions with large size of creative class are also some of the
most affluent and growing.
 To some extent such differences were always there - but now they are
more widespread and pronounced.

Chicago integrated the creative class into the city's culture and politics by
treating them essentially as just another "ethnic group" - gave sufficient space
to express their identity

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Creative Class and Characteristics

Definition

Creative Class is a fast-growing, highly educated, and well-paid segment of the


workforce on whose efforts corporate profits and economic growth increasingly
depend.

Types

1. Super creative core includes scientists and engineers, poets, artists etc.
They produce new forms or designs that are readily transferable and
broadly useful
2. Beyond the core group, the creative class also includes "creative
professionals”
a. They work in knowledge-intensive industries like financial services,
legal, healthcare etc
b. Engage in creative problem-solving, using complex knowledge to
solve specific problems
c. Require high degree of formal education

Characteristics of Creative Class

1. They do a wide variety of work in a wide variety of industries


2. They do not consciously think of themselves as a class. Yet they share a
common ethos that values a) creativity, b) individuality, c) difference, and
d) merit.
3. Creative class are diverse across the dimensions of age, ethnicity and
race, marital status (many of them are single), and sexual preference
(Gays).
4. Creative-class people do not lose their lifestyle preferences as they age.
They don't stop bicycling or jogging. They also continue to value diversity
and tolerance

Creative Centers

 “Low entry barriers” for people - where newcomers are accepted quickly
into all sorts of social and economic arrangements.
 Plug and play community – A community that somebody can move into
and put together a life or at least a facsimile of a life---in a week.(Get
adjusted quickly)
 People can find a) opportunity, b) build support structures, c) be
themselves, and d) not get stuck in any one identity.
 Thick labor markets - places that offer many employment opportunities
 Greater diversity and higher levels of quality of place – Lifestyle is very
imp.
 Environment open to differences – Creative people generally grow up
feeling like outsiders, different in some way from most of their
schoolmates
 Nightlife with a wide mix of options

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 Active, participatory recreation over passive, institutionalized forms –


Sidewalk musicians, cafes, bistros etc
 Active outdoor recreation facilities (not stadiums etc) – Bicycling,
Rollerblading, kayaking, snowboarding etc.
 Authenticity and Uniqueness comes from historic buildings,
neighborhoods, unique music scene etc. – Authenticity offers unique and
original experiences.
 Openness to immigration is particularly important for smaller cities and
regions
 The ability to attract so-called bohemians is key for larger cities and
regions
 Presence of people climate that appeals to them and meet their needs.
 Kids – good schools are not important – as many of them are single or
marry late

Why Cities have failed to attract creative people?

 They are either unwilling or unable to do the things required to create an


environment or habitat attractive to the creative class.
 They just pay lip service to changes required
 Expenditure on stadiums etc which are not important to creative people
 Olson’s arguments
o The decline of nations and regions is a product of an organizational and
cultural hardening of the arteries - Institutional Sclerosis (Excessive
resistance to change)
o Societies find it difficult to adopt new cultural patterns, regardless of
how beneficial they might be. (e.g. US and England)
o Old Cultural and attitudinal norms become powerfully ingrained - do
not allow the new norms and attitudes to grow up and get accepted.
 Kotkin’s arguments
o In an effort to follow Silicon Valley end up being Nerdistans.
o Nerdistans are bland, uninteresting places with acres of identical
office complexes, asphalt parking lots, freeways clogged with cars
and strip-malls sprawling in every direction
The lack of lifestyle amenities is causing significant problems in attracting top
creative people

Asian Development Bank: Managing Asia’s Cities


Summary by Rahul Saha

Asia’s Urban Challenge


CONTEXT

Asia’s Urban Challenge is taken from a survey report titled ‘Managing Asian
Cities’ that was published by ‘The Asian Development Bank’. The survey

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analysis aims to provide a useful management resource, canvassing key issues


and pointing managers to appropriate responses to problems pertaining to the
various Asian cities due to urbanization.

SUMMARY

Asian Urban Challenge is about the challenges faced by Asia due to rapid
relentless urbanization of megacities (cities with more than 10 million
inhabitants) which is propelled by higher productivity of urban jobs. These
megacities generate employment and nurture innovation & entrepreneurship but
the negative effects of urbanization like environmental degradation, uncollected
garbage, traffic congestion, beggars and morally degraded conditions of vast
squatter areas far are some of the harsh realities that need to be addressed. The
linkages of family, faith, civic culture that are the building blocks to a city are
weakening & in order to save Asia from declining, a more goal driven mission
that maintains a balance has to be followed rather than simple technical
responses to a series of problems.

Megacities are where the global & local interconnect and new technology has
open up worldwide flows of information, capital & labor. Today, there are 12
megacities in Asia that are nation size in population. With emergence of mega
cities, development is encroaching onto more agricultural & forests. Recognition
of different city topologies, population, and economic activity is important to
understand the urban development dynamics.

Hierarchy of Urban Settlements

1. Global cities: typically with 5-20 million and more people within their
administrative boundaries but serving very large global territories:
London, Paris, New York, Tokyo etc.

2. Sub-global cities: typically with 1–10 million people and performing


global service functions for certain specialised services (banking, fashion,
culture, and media): all European capitals.

3. Regional: population of approximately 250,000–1 million; some of these


have characteristics as “showing evidence of world city formation.”

4. Provincial: population of approximately 100,000–250,000.

Urbanization: Scattered villages growing into metropolis – How and


Why?

(1)Households and enterprises interact at broader scales to form a settlement


region of villages, focused on a town. (2) When these towns begin to focus
economically and culturally on a provincial city. (3) Larger city regions focused

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on a big city where regional development policy, particularly that related to


strengthening of urban-rural backward and forward linkages, has relevance.

The development of small settlements to large cities are mostly instigated by


links of physical infrastructures like inter-city roads, railways, navigable
waterways and power grids i.e. strong transportation & communication system.
An example of a village called Shenzhen in Pearl River Delta is given, which was
a poor fishing village and now is one of China’s most competitive cities due to its
volume of foreign trade for being the fastest growing manufacturing base in the
world. Another example of Metro Manila, Philippines is given which talks about
multistage development of metropolitan governance.

Decentralization: Central Power Vs Local Government

All the Asian countries have a long histories of local governance but their current
structures most of which is inherited from the colonial powers need amendments
to better manage rapidly growing cities and towns. Most decentralization has
been more of a transfer of administrative responsibility than commitment
towards local governance. Asian local government works under legislation which
determines power, authorities & functions.

Decentralization options:

1. Deconcentration—transfer of responsibility from central agencies and


ministries to their regional or field units. Some discretion is allowed but
they are subordinate to the central authority.

2. Delegation—functions moved from central government to semi-


autonomous public authorities and corporations granted the authority of
planning and implementation.

3. Devolution—transfer of decision-making power and authority to local


governments which have the power and resources to perform relatively
independently from central agency intervention.

The degree of responsibility between central, federal and local governments is


the vertical dimension of decentralization. Horizontal dimension talks about how
large cities are organised to finance & deliver services of their areas.

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In order to manage complex metropolitan cities there’s an additional level of


metropolitan government. This can be further identified into

(1) Metropolitan city in form of single local governance that is responsible for
all local functions. This is evolved either from a previous political
jurisdiction or amalgamation of many. E.g. Bangkok Metropolitan
Authority, administrations in Seoul, Kuala Lumpur, Surabaya, and Jakarta.
This arrangement eases the coordination and implementation of plans and
programs.
(2) This is described as the ‘jurisdictional fragmentation’ where responsibility
for local services falls onto the local governments of the metropolitan area
but they lack the necessary resources and capabilities. E.g. Metro Manila
in Philippines

The metropolitan agency takes a number of forms:


a) Metropolitan Development Council (MDC) which allows the constituent
local governments to retain their powers.
b) Metropolitan Development Authority (MDA) with corporate powers and
functions, revenue sources that are often from the national government,
and a technocratic administrative structure.

For this the text provides five examples of various forms of metropolitan
governance,
1. Bangkok Metropolitan Authority
2. Metro Naga Development Council
3. Mumbai Metropolitan Region Development Authority
4. Tokyo Metropolitan Government
5. Seoul Metropolitan Government

In general local governments falls under two types:

(a) The centralized model, which has clear lines of authority, from the
central government’s ministry of the interior through a centrally appointed
head, to the municipality, which either has a locally elected or an
appointed mayor and council. The head of the region, as the local chief
executive and the representative of central government, has the authority
to overrule local councils and supervise local expenditures. Variants of this
system are found throughout Central Asia and the former French colonies
of Southeast Asia.

(b) The devolved model is often seen as a development due to British


colonies and involves local government through elected councils at the

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county and sub-county levels. This system has less central government
interference and greater local budgetary authority than the other. A key
feature, often, is the committee system of decision making instead of a
strong executive, for administering public services

This was followed by examples of three local government systems:


Philippines, Singapore and People’s Republic of China

Asset Management and Unbundling

The assets of a city comprise those of the administrative units— including their
financial assets, land, real estate, infrastructure, and human resources; those of
all its other stakeholders— including people, businesses, and other
organizations; and the city’s natural resources and environment. There is a clear
distinction between the assets owned by or under the control of the local
government and those of everyone else. Much of these were earlier provided by
state monopolies and typical problems were low productivity, high costs, low-
quality service, lack of asset maintenance, insufficient revenue etc. For this
unbundling is encouraged so that potentially competitive functions are under
separate ownership from natural monopoly components where there is
substantial invested capital

Asset Management can be defined as the management of the acquisition, use,


and disposal of assets; maximizing their service delivery potential; and the
management of related risks and costs over their lifespan. Asset management
requires an inventory that is recorded in a central register; valuation; life-cycle
costs from initial capital, through operating and maintenance costs to salvage
and disposal costs.

Examples of Unbundling
1. Electricity: Transmission and distribution split from generation.
2. Telecommunications: Local network split from long-distance mobile and
value-added services.
3. Water: Source development separated from distribution and both from
wastewater treatment.
4. Natural gas: High pressure transmission and local distribution separated
from production, supply, and storage.
5. Railways: Tracks, signals, stations, and other fixed facilities separated
from train operations and maintenance

Corporatization & Privatization


This segment of the report talks about the need for privatization or
corporatization as many of the public utilities are supported by local government
which are hard pressed for finance and thus these suffer a lot. For this a
corporate character that encourages management by professionals rather than
politicians should be assumed. Corporatization refers to the reorganization of a
publicly owned service to operate according to private sector, corporate
principles. Privatization is the transfer of a function, or part of it, to the private
sector, but generally this leaves a local government retaining some control. E.g.

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Build, Operate & Transfer (BOT) is a befitting example for privatization in water
segment or in case of highways.

Efficient Governance
Furthermore, the report talks about coordination mechanism to work towards a
more efficient and authoritarian government by Increasing economic integration
of rural areas within the urban economic system and fabric suggests the need for
improving both cross-border and cross-sector coordination without the costly
redrawing of local government boundaries. Two prerequisites for good
governance are more public participation in decision making and public oversight
of government functions.

The report further delves upon Urban Partnerships by citing some prominent
examples.
1. Central London Partnership
2. The circle Initiative
3. Paddington Waterside Partnership
4. Building London creating Future
City Development Strategies (CDS)

Planning for sustainable development as a whole is the key to successful city


management. City development strategies (CDSs) are examples of planning
instruments that can provide the planning context for a city or city region and
enable a better understanding of the city’s current problems and future
developments. A CDS must be built on an economic foundation. Such a strategy
can change the way a city is managed by focusing on a new economic structure
that promotes the city as an attractive destination for regional, national, and
global investment. A successful CDS highlights new and unique features of a city
and builds upon these for future development. A key output of a CDS is an
investment program to support the vision. It must have the commitment of
stakeholders, including funding support from the national and local governments.
These programs need to be implemented within the context of economic and
social objectives, which will provide the basis for prioritizing investments.

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Everybody Loves a Good Drought


P. Sainath

Summary by Sandeep Nair

In this article, the author wants to elucidate the fact that fund allocation process
for the drought relief programs involves a lot of politics and the media also plays
an important role in this process.

The author starts by stating that the benefits of drought relief programs
do not reach the people who need them. It is an opportunity for many to derive
financial benefit out of it. He justifies it by providing some figures on how at few
places like that in Maharastra, Orissa, etc the budget allocated was more than
the required. He then explains the concept of “Drought-Prone Areas
Programme (DPAP)”, under which the government has ability to include blocks
of land affected by drought. Once the blocks under DPAP, they receive huge
amount of money as well as benefits from host of other schemes, including
Employment Assurance Schemes (EAS), anti desertification projects,
drinking water missions etc. He then explains with the help of figures that
how in the past the, the number of blocks under DPAP scheme has increased
significantly and the blocks which are included had good average rainfall figures.
(Example: lowest rainfall in past 20 years in Kalahandi, Orrisa is 978 mm, which
is way above from many other districts)

He says that the poor suffer acute drought even in cases of abundance of
rainfall because ‘the water resources are colonized by the powerful’. He says
that government thinks that “by throwing money at such regions, the small fish,
who have big votes, can be pacified”.

He then explains the spiral of drought scam. It also happens to be a, “who


will bring the maximum fund to their district” tussle. Contractors and politicians
take up the cause to collector and get local newspaper to print about the
situations. And this spiral goes on from here to district headquarters to state
level to central level to international level organization like UNDP,UNICEF etc. all
in order to demand allocation of funds. At the same time people at various levels
also use the media at both local and national level to exaggerate the situation.
The “reverse spiral” begins when funds are actually allocated by foreign donors
looking for some good PR. As the money trickles down to the districts, various

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parties including politicians, consultants, private contractors etc. take their cuts.
The places actually affected by the drought do not get much money. Since, the
basic problem is not solved, this whole process starts afresh next year too.

He then introduces the other problems linked with water, like river water
sharing within the states of India and with Bangladesh. Therefore the struggle
over water resources operates at various levels, coming down to between
villages and between castes & classes.

Finally he ends with following lines, “There are now two kinds of drought:
the real and the rigged. Both can be underway at the same time, in the same
place. As the reports that follow seek to show, they often are.”

Political Economy of Agrarian distress


K C Suri

Summary by Chayan Mukhopadhyaya

The author believes that the reasons for agrarian distress in India lie in the
conjunction of the changing nature of agriculture and democratic politics.

Aim of the author: - To examine the inter-relationship between the structural and
economic changes since independence to the political domain and see how the
changed nature of politics and policy priorities have exacerbated the agrarian
distress.

Quotes and (or) Views Supporting Views/Points


Two paradoxical situations:-
First, a large number of farmers’
suicides have been reported from
states which are relatively
agriculturally developed, which have
seen strong peasant movements in
the past and where the leadership of
political parties has come
predominantly from farming
communities.

Second, Democracy is supposed to


respond to and accommodate the
interests of different sections of the
society. But it is aparadox that the
interests of the farmers who constitute
a large chunk, one-fifth of the
electorate, are not cared for by the
government.

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Handout Summary Business, Government and Society

Changes in Agrarian Political Economy:-

1. British rule increased the market oriented production(cash crops). Some


sections benefitted while some degraded.

2. After independence, there has been 3 phases of evolution of agrarian


relations

(a) 1950s and 60s:- Reform and consolidation of agriculture on the


lines charted out during freedom struggle :- need to take up
modern methods and political efforts to increase production and
well being of farmers

(b) 1970s and 80s:- Green revolution and growth of political


populism:- costs to farmers increased and so did their yield. But
uncertainty of crop yield and fluctuations in prices for
agricultural produce caused a great deal of mental distress to
the farmers. The government though took steps for farmers’
welfare by imposing quotas on imports

(c) 1990s onwards:- liberalisation and deterioration of farmers’


condition:- once we opened gates to foreign competition, the
condition of the farmers here degraded because of obvious
reasons.

3. Some economists suggest nowadays that farmers should stop producing


cash crops and produce light crops to get out of this predicament.
However, farmers say that t is not possible since they are already deep in
debt and if they produce light crops they wont be able to repay their
loans.

4. Farmers don’t have any confidence on the minimum return on their labour
and investments.

5. Crop insurance scarcely available; even where it is available, insurance


companies find umpteen methods to avoid payment.

6. The loss of status, uncertainty of income, unbearable debts, unfulfilled


needs and the inability to decipher the factors responsible for their
predicament, all combine to make farmers desperate. It is not poverty that
is driving them to suicide, but it is pauperisation and immiserisation.

Changing Nature of Politics:

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Handout Summary Business, Government and Society

1. Political parties earlier were concerned about the farmers’ status and their
problems, but slowly they lost interest and started taking farmers’ votes
for granted. This happened because farmers were not united and thus,
didn’t have enough clout to influence the government.

2. Political leaders’ source of wealth changed to industries and businesses


from agriculture.

3. It is difficult to organise farmers because they are not homogeneous in


terms of economic conditions as well as social background.

4. During the last two decades, we haven’t seen any strong all-India peasant
movement.

5. Farmers’ interest matter little to the national ruling elites.

6. Since fighting elections i very expensive nowadays, even the wealthiest


farmer cannot think of doing so.

Recent change:-

Political parties have begun to speak about farmers’ distress in the wake of many
farmer suicides.

Need of the hour:-

Change in the strategies of economic development which have hitherto


downgraded agriculture and stunted non-farm employment, with mechanisms to
ensure proper remuneration to agricultural produce, and the willingness of the
political class to support farmers and curb the growth of corruption and their own
illegal amassment of wealth.

Modernising Agriculture
Arvind Panagariya

Summary by R Umesh

This is another chapter from Arvind Panagariya’s book “India: The emerging
gaint”

3/5th of India’s workforce is in argriculture. While analyst popularly believe that


increasing productivity in agriculture is the key to improve condition of the poor,
Panagariya suggests that there are better way to achieve this objective.

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He argues, poverty can be tackled by generating employment in industry and


services. This will reduce work force in agriculture hence the ratio of labor-to-
land. Thereby the wages will increase in argricultural sector. India produces self-
sufficent cereals, hence there is a need for diversification into fruits, vegetables
and other commercial crops.

He is completely against any kind of subisidary in food, fertilizer, electricity or


water. These methods are actually regressive.

He propose varous set of reforms in Agriculture

PRODUCT MARKET REFORM

There is a need for external trade liberization – farmers can benefit from the
products of their comprative advantage and technological improvements forced
by compitition from world’s other efficient producers.

The Commission for Agricultural Costs and Prices (CACP) which sets minimum
support price (MSP) and FCI (Food Corporation of India) which buys at this price
needs to be abolised. FCI storage is highly inefficent and significant loss of stock.
FCI maintains a work force of 400000 people. Instead maintain a small stock of
around 20 million tons procured at market price to meet food emergencies.

Interstate Movement of Grain and Related Distortions:

Essential Commodities Act (ECA) 1955 which enables states to impose


restriction on the storage, transport, price, distribution, and processing of
agricultural produce must be repelled. ECA was essential introduced before
green revolution due to food shortage causing traders to hoard food. Its not
needed now.

Integrate internally (among states) before integrating globally.

Agricultural Marketing

State-Level Agricultural Produce Marketing Committee (APMC) Acts govern the


marketing of agricultural produce in India. APMC monopoly between farmers and
whole salers. APMC agents are corrupt setting prices in a non-transparent
manner by taking bribe from wholesalers

This model doesn’t serve farmers interest for three reasons

i. Rising income and shifting consumer tastes from cereals towards fruit,
vegetable etc. Volume of produce to be handled is expanding rapidly – not
scalable

ii. Rising income is shifting tastes toward higher quality and speaciality
produce

iii. Exports and Imports are becoming increasing important

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Handout Summary Business, Government and Society

States have started replacing APMC, it introduce three new avenues to purchase
and sales

i. In any marketing area, farmers, consumers, authorities can establish


market yards and trade the produce.

ii. Private yards can be established by obtaining licenses to directly trade


with the farmers

iii. Farners can contract to sell their produce directly to a buyer bypassing the
market.

Example of reliance fresh, Bharti, HLL, Tata, MacDonalds setting up contract with
farmers.

Echoupal by ITC, a kiosk which enables farmers to obtain latest price.

Small-Scale Industries Reservation

Prevents the growth of industry. Needs to be abolished.

Food Processing

“Only 2% of fruit and vegetable production is processed compared with 30% in


Thiland, 70% in Brazil…” Planning commission of India. Hence offers great scope.

Infrastructure bottlenecks are being addressed

Food Safety and Standards Act (FSSA) aims to modernized legal framework for
the food-processing industry.

Commercial/Corporate Farming

Farms in India are becoming smaller and smaller (land owned per farmer), hence
very inefficent

Corporate farming allows consolidation of these farms and provides handsome


rent and job to the land owners.

This process is slow but other sectors in economy will absorb the displaced
workers.

INPUT MARKET REFORMS

Land

Traditional Land Reforms – 1. Abolish zamindars, 2. Imposition of a ceilng on land


holding and redistribution, Securing the rights of tenant-cultivator. Didn’t work

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completely, because of political power of the land lords. Rent control also failed
at implementation.

The vexed Issue of Land Titles –

No proper state issued titles. Land records were kept for pupose of
revenue collection. Whoever paid revenue was consider the owner of the
land.

India property legislation was never framed, registering authority doesn’t


verify the document.

Records are in bad shape and not upto date.

Many pending cases relating to land.

Current efforts to digitize land records but it doesn’t solve problem of


state guaranteed titles. This has huge payoff and improve rural land
market efficency.

Rural Credit

C. H. Hanumantha Rao notes farmers meet 60% credit through formal financial
institution and 40% through inform source.

High interest rate in informal lending.

Some state land leasing is illigal hence cannot access institutional credit

Improve credit through contract farming, big farms have easy access to credit.

Expand rural credit through self help group (SHG) of women

Subsidized bank loand is a poor subsititute for social policy

Best way to aid poor is through direct transfer by proper instrument

Fertilizer

Ablolish fertilizer subside to improve quality of fertilizer and promote efficent use
of the same.

Electricity and Irrigation

Ablolish subsidary and restrict politians making promises of free electricity and
water.

It is distortionary and lead to wastage of water and electricity.

Depleting ground water because of overusage of electric pump

PUBLIC INVESTMENT IN AGRICULTURE AND RURAL


INFRASTRUCTURE

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Develop rural road, electicity, market and major/minor irrigation project.

Bharat Nirman program proposes to create 10 million hectares of additional


assured irrigation.s

Knowledge@Wharton interview with M. Yunus, Founder


of the Grameen Bank.
Summary by Bharathan Gopalakrishnan

Muhammad Yunus is a Bangladeshi banker and economist. He previously


was a professor of economics where he developed the concept of microcredit.
These loans are given to entrepreneurs too poor to qualify for traditional bank
loans. Yunus is also the founder of Grameen Bank. In 2006, Yunus and the
bank were jointly awarded the Nobel Peace Prize, "for their efforts to create
economic and social development from below."

• M. Yunus believes that micro-finance has to be provided without collateral


and most commercial organizations don’t do it as their main intention is
profit-making.

• Yunus influenced the Govt to introduce regulations to control the interest


rates offered by Micro-credit organizations in general.

• He also is against the free run of globalization and wants rules in place to
prevent large economies from dominating smaller ones

• The current financial crisis is a good opportunity to re-design the whole


system so that no one (rich or poor) is ever thrown out of the financial
system

• Even though Grameen Bank is NOT a non-profit organization, it is not run


on a profit maximization mode. This objective is also understood by the
employees at Grameen Bank

• Grameen Health Management Centres are being set up where the


technology of the mobile phone is being used to provide health care for
patients in villages. For this Grameen has already tied up with Intel and is
trying to get into partnership with Google too.

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• Grameen food products rely on very little marketing and hence cost very
less. The idea is to make nutrients available for everyone in the country.

• Lots of other business ventures are approaching Grameen for tie-ups. The
main intention of all this is to make goods available to the poor at
cheapest of prices without sacrificing the quality.

• Grameen bank is encouraging entrepreneurship among the children of


Grameen families.

Serving the World’s Poor, Profitably


C.K. Prahalad & Allen Hammond

Summary by KrishnaRao Bodepalli

Improving the lives of the billions of people at the bottom of the economic
pyramid is a noble endeavour; it can be a lucrative one.

This is the theme for his views (the fortune at the bottom of the pyramid)

15 yrs from now the global economic scenario may be bleak or bright and
that depends upon the big multinational companies to enter and invest the
poorest markets. The MNCs need not thrive for the social upliftment but do their
business in a fair manner. In the future the markets are going to be saturated
and trying out this will only help them to sustain.

The developing world also needs financial aid and improved governance.

Misconceptions -

• The barriers like corruption, illiteracy, inadequate infra although real


but are much lower than what is typically thought.
• The goods are sold incredibly cheap and there is no room for the
new competitor to enter the market.
• The margins are so low that it becomes unprofitable.

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But, the real problem lies in the establishing market and distribution channels.

Several examples stated:

• Grameen telecom’s village owned by a single entrepreneur earning


$90 per village a month. And villagers spend their 7% of their $200 per
capita income
• Kenya teenagers are trained to be successful web page designers.
• Poor farmers in El Salvador use internet to sell crops.
• Indian women use PCs to interpret real time satellite images so that
their husbands can go for fishing as per the date
• Centers run in Uganda by women information resource electronic
information (WIRES) focuses on markets and prices as well as credit and
trade support system.
• Gyandoot started in central India, network of 1000 learning centers
to distribute vidya to BOPs(bottom of pyramid)
• Dupont company uses internet kiosks to provide information on
agriculture and receive inputs from farmers on several crop disease,
fertilizers.
• Hindustan unilever does business of $2.6billion with zero working
capital in BOPs
• ITC initiative through e-choupal serving 600000 farmers has
benefitted both with latest information on weather and best practices. It
helps in easy e-procurement for ITC in return.
• US based dandin corp. Uses ultrawide band communications to unite
1000 islands remotely connected.

Untapped potential

(in terms of) Purchasing power parity

4 billlion people < $2000

2 billion people < $2000- $20000

100 million > $20000

So a huge chunk of people is being left out at the bottom of the pyramid
(financial inclusion)

Comparing the high cost economy of poor

Urban gets interest rate for 12-18% rural gets- 600-1000%

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That is the case in phone calls, in rice purchases, diarrhoea medication etc

So higher quality at lower prices, maintaining attractive margins with wide base
will sort the issue.

Using latest technologies and innovation will lead to the elimination of the
intermediaries and can be done by E- commerce.

These markets are at the earliest stages, so rapid growth.

Strategies for serving market

• Many employees want to work on projects that make a real


difference in the lives of the poor.
• Hul managers from CEO to reconnect with the poor and spend six
weeks , to gather the experience, abt their products.
• HP introduced a e-inclusion response, it got overwhelming response
frm its employees
• MNCs take mentoring roles for the entrepreneurs in the BOP
markets in terms of technical help, seed funding, business support
• Pay particular attention to women entrepreneurs for all the reasons.
• BOPs can be risky, so partnerships, consortia will alleviate a bit
• Metcalfe’s law- usefulness of network equals the square of the
numbers of users.

The Indian Innovation System


Rishikesha T. Krishnan

Summary by

Innovation: A Guide to the Literature


Jan Fagerberg

Summary by

The Cathedral and the Bazaar


Eric Raymond

Summary by Raja Sekar B and Chhandak Barman

I anatomize a successful open-source project, fetchmail that was run as a


deliberate test of some surprising theories about software engineering
suggested by the history of Linux. I discuss these theories in terms of two
fundamentally different development styles, the "cathedral" model of most of
the commercial world versus the "bazaar" model of the Linux world. I show that
these models derive from opposing assumptions about the nature of the

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software-debugging task. I then make a sustained argument from the Linux


experience for the proposition that "Given enough eyeballs, all bugs are
shallow", suggest productive analogies with other self-correcting systems of
selfish agents, and conclude with some exploration of the implications of this
insight for the future of software

Eric Raymond.

The essay contrasts two different free software development models:

 The Cathedral model, in which source code is available with each


software release, but code developed between releases is restricted to an
exclusive group of software developers. GNU Emacs ( It’s a group that’s
dedicated to develop free open software’s) and GCC are presented as
examples.
 The Bazaar model, in which the code is developed over the Internet in
view of the public. Raymond credits Linus Torvalds, leader of the Linux kernel
project, as the inventor of this process. Raymond also provides anecdotal
accounts of his own implementation of this model for the fetchmail project.

The essay's central thesis is Raymond's proposition that "given enough


eyeballs, all bugs are shallow" (which he terms Linus's Law): the more
widely available the source code is for public testing, scrutiny, and
experimentation, the more rapidly all forms of bugs will be discovered. In
contrast, Raymond claims that an inordinate amount of time and energy must
be spent hunting for bugs in the Cathedral model, since the working version
of the code is available only to a few developers.

The Whole of the article goes around the same concept of how the existing codes
can be used to fine tune the code to satisfy the needs of the user

The Author talks about 19 points that good open software must have.

There are 19 steps to creating good open source software listed in his essay:

1. Every good work of software starts by scratching a developer's personal


itch.

2. Good programmers know what to write. Great ones know what to rewrite
(and reuse).

3. Plan to throw one away; you will, anyhow.

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4. If you have the right attitude, interesting problems will find you.

5. When you lose interest in a program, your last duty to it is to hand it off to
a competent successor.

6. Treating your users as co-developers is your least-hassle route to rapid


code improvement and effective debugging.

7. Release early. Release often. And listen to your customers.

8. Given a large enough beta-tester and co-developer base, almost every


problem will be characterized quickly and the fix obvious to someone.

9. Smart data structures and dumb code works a lot better than the other
way around.

10.If you treat your beta-testers as if they're your most valuable resource,
they will respond by becoming your most valuable resource.

11.The next best thing to having good ideas is recognizing good ideas from
your users. Sometimes the latter is better.

12.Often, the most striking and innovative solutions come from realizing that
your concept of the problem was wrong.

13.Perfection (in design) is achieved not when there is nothing more to add,
but rather when there is nothing more to take away.

14.Any tool should be useful in the expected way, but a truly great tool lends
itself to uses you never expected.

15.When writing gateway software of any kind, take pains to disturb the data
stream as little as possible—and never throw away information unless the
recipient forces you to!

16.When your language is nowhere near Turing-complete, syntactic sugar can


be your friend.

17.A security system is only as secure as its secret. Beware of pseudo-


secrets.

18.To solve an interesting problem, start by finding a problem that is


interesting to you.

19.Provided the development coordinator has a communications medium at


least as good as the Internet, and knows how to lead without coercion,
many heads are inevitably better than one.

The Article is more of technical one in which her quotes examples of his own
experience for each one of the above points.

Please read the article for more information on the examples.

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Handout Summary Business, Government and Society

The Mail Must Get Through

1. Every good work of software starts by scratching a developer's personal itch.

2. Good programmers know what to write. Great ones know what to rewrite (and
reuse).

Linus Torvalds, for example, didn't actually try to write Linux from scratch.
Instead, he started by reusing code and ideas from Minix, a tiny Unix-like OS for
386 machines. Eventually all the Minix code went away or was completely
rewritten - but while it was there, it provided scaffolding for the infant that would
eventually become Linux.
In the same spirit, I went looking for an existing POP utility that was reasonably
well coded, to use as a development base.

3. "Plan to throw one away; you will, anyhow." (Fred Brooks, The Mythical Man-
Month, Chapter 11)

Or, to put it another way, you often don't really understand the problem until
after the first time you implement a solution. The second time, maybe you know
enough to do it right. So if you want to get it right, be ready to start over at least
once.

4. If you have the right attitude, interesting problems will find you.

5. When you lose interest in a program, your last duty to it is to hand it off to a
competent successor.

The Importance of Having Users

6. Treating your users as co-developers is your least-hassle route to rapid code


improvement and effective debugging.

In fact, I think Linus' cleverest and most consequential hack was not the
construction of the Linux kernel itself, but rather his invention of the Linux
development model. When I expressed this opinion in his presence once, he
smiled and quietly repeated something he has often said: "I'm basically a very
lazy person who likes to get credit for things other people actually do." Lazy like
a fox. Or, as Robert Heinlein might have said, too lazy to fail.

Release Early, Release Often

Early and frequent releases are a critical part of the Linux development model.
Most developers (including me) used to believe this was bad policy for larger
than trivial projects, because early versions are almost by definition buggy
versions and you don't want to wear out the patience of your users.
This belief reinforced the general commitment to a cathedral-building style of
development. If the overriding objective was for users to see as few bugs as

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possible, why then you'd only release one every six months (or less often), and
work like a dog on debugging between releases.

7. Release early. Release often. And listen to your customers.

Granted, Linus is a damn fine hacker. But Linux didn't represent any awesome
conceptual leap forward. Linus seems to me to be a genius of engineering, with a
sixth sense for avoiding bugs and development dead-ends and a true knack for
finding the minimum-effort path from point A to point B. So, if rapid releases and
leveraging the Internet medium to the hilt were not accidents but integral parts
of Linus' engineering-genius insight into the minimum-effort path, what was he
maximizing? What was he cranking out of the machinery?

8. Given a large enough beta-tester and co-developer base, almost every


problem will be characterized quickly and the fix obvious to someone.

Or, less formally, "Given enough eyeballs, all bugs are shallow." I dub this:
"Linus' Law".

Here, I think, is the core difference underlying the cathedral-builder and bazaar
styles. In the cathedral-builder view of programming, bugs and development
problems are tricky, insidious, deep phenomena. It takes months of scrutiny by a
dedicated few to develop confidence that you've winkled them all out. Thus the
long release intervals, and the inevitable disappointment when long-awaited
releases are not perfect.
In the bazaar view, on the other hand, you assume that bugs are generally
shallow phenomena - or, at least, that they turn shallow pretty quick when
exposed to a thousand eager co-developers pounding on every single new
release. Accordingly you release often in order to get more corrections, and as a
beneficial side effect you have less to lose if an occasional botch gets out the
door.

And maybe it shouldn't have been such a surprise, at that. Sociologists years ago
discovered that the averaged opinion of a mass of equally expert (or equally
ignorant) observers is quite a bit more reliable a predictor than that of a single
randomly-chosen one of the observers. They called this the "Delphi effect".

When Is A Rose Not A Rose?

9. Smart data structures and dumb code works a lot better than the other way
around.

10. If you treat your beta-testers as if they're your most valuable resource, they
will respond by becoming your most valuable resource.

Popclient becomes Fetchmail

11. The next best thing to having good ideas is recognizing good ideas from your
users. Sometimes the latter is better.

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Interestingly enough, you will quickly find that if you are completely and self-
deprecatingly truthful about how much you owe other people, the world at large
will treat you like you did every bit of the invention yourself and are just being
becomingly modest about your innate genius. We can all see how well this
worked for Linus!

12. Often, the most striking and innovative solutions come from realizing that
your concept of the problem was wrong.
Don't hesitate to throw away superannuated features when you can do it without
loss of effectiveness. Antoine de Saint-Exupery (who was an aviator and aircraft
designer when he wasn't being the author of classic children's books) said:

13. "Perfection (in design) is achieved not when there is nothing more to add,
but rather when there is nothing more to take away."
When your code is getting both better and simpler, that is when you know it's
right.
Fetchmail Grows Up

14. Any tool should be useful in the expected way, but a truly great tool lends
itself to uses you never expected.

15. When writing gateway software of any kind, take pains to disturb the data
stream as little as possible - and *never* throw away information unless the
recipient forces you to!

A Few More Lessons From Fetchmail

16. When your language is nowhere near Turing-complete, syntactic sugar can
be your friend.
Another lesson is about security by obscurity. Some fetchmail users asked me to
change the software to store passwords encrypted in the rc file, so snoopers
wouldn't be able to casually see them.
I didn't do it, because this doesn't actually add protection. Anyone who's
acquired permissions to read your rc file will be able to run fetchmail as you
anyway - and if it's your password they're after, they'd be able to rip the
necessary decoder out of the fetchmail code itself to get it.
All .fetchmailrc password encryption would have done is give a false sense of
security to people who don't think very hard. The general rule here is:

17. A security system is only as secure as its secret. Beware of pseudo-secrets.

Necessary Preconditions for the Bazaar Style

It's fairly clear that one cannot code from the ground up in bazaar style. One can
test, debug and improve in bazaar style, but it would be very hard to originate a
project in bazaar mode.
When you start community-building, what you need to be able to present is a
plausible promise.

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I think it is not critical that the coordinator be able to originate designs of


exceptional brilliance, but it is absolutely critical that the coordinator be able to
recognize good design ideas from others.

A certain base level of design and coding skill is required, of course, but I expect
almost anybody seriously thinking of launching a bazaar effort will already be
above that minimum.
A bazaar project coordinator or leader must have good people and
communications skills.
This should be obvious. In order to build a development community, you need to
attract people, interest them in what you're doing, and keep them happy about
the amount of work they're doing. Technical sizzle will go a long way towards
accomplishing this, but it's far from the whole story. The personality you project
matters, too.

The Social Context of Open-Source Software

It is truly written: the best hacks start out as personal solutions to the author's
everyday problems, and spread because the problem turns out to be typical for a
large class of users. This takes us back to the matter of rule 1, restated in a
perhaps more useful way:

18. To solve an interesting problem, start by finding a problem that is interesting


to you.

19: Provided the development coordinator has a medium at least as good as the
Internet, and knows how to lead without coercion, many heads are inevitably
better than one.
I think the future of open-source software will increasingly belong to people who
know how to play Linus' game, people who leave behind the cathedral and
embrace the bazaar. This is not to say that individual vision and brilliance will no
longer matter; rather, I think that the cutting edge of open-source software will
belong to people who start from individual vision and brilliance, then amplify it
through the effective construction of voluntary communities of interest.

India & the Knowledge Economy: Opportunities &


Challenges
Carl Dahlman & Anuja Utz

Summary by Krati Garg

Knowledge Economy: One that creates disseminates and uses knowledge to


enhance its growth and development.

1. Current Economic Context

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2. Importance of Knowledge in an increasingly dynamic and competitive global


environment

 Application of knowledge is a key source of growth and competitiveness in


global economy

 Increased speed of creation and dissemination of knowledge has made it


more important in development strategy.

 Knowledge Revolution: The twin forces of GLOBALIZATION and


TECHNOLOGICAL ADVANCES have spurred a knowledge revolution which
makes knowledge very important.

 Egs of knowledge revolution: Closer links between science and technology,


increased importance of education and lifelong learning, etc.

 Countries’ competitiveness is increasingly becoming dependent on their


ability to access, adapt, utilize and create knowledge.

 Knowledge application has become driver for economic growth – increase


productivity, create new products/ services etc.

 KE doesn’t always mean high tech industries. Creating a new knowledge or


use existing one to help do things better also make up the KE.

(KE will be used for knowledge economy henceforth)

3. Opportunities for India to become Knowledge Economy

4 pillars of KE:

1. An economic and institutional regime that provides incentives for the


efficient creation, dissemination and use of existing knowledge

2. An educated and skilled population that can create and use knowledge

3. An efficient innovation systems of firms, research centres, universities,


consultants that can tap into the growing stock of global knowledge and
assimilate and adapt it to local needs, as well as to create relevant new
knowledge.

4. Dynamic information infrastructure that can facilitate the effective


communication, dissemination, and processing of information.

Strengths for India to become KE:

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1. Skilled human capital

2. Democratic system

3. Widespread use of English

4. Macroeconomic stability

5. Dynamic private sector

6. Institutions of free market economy

7. Largest local market in the world

8. Well developed financial sector

9. Broad and well developed S&T infra

10.Recent years development of ICT sector

11.India becoming the most sought after destination for RnD.

Benchmarking India’s overall knowledge readiness:

Knowledge Assessment Methodology (KAM)-

 World Bank tool to benchmark countries against others in global KE.

 Compares countries quantitatively and qualitatively on the four pillars of


KE

 Helps identify opportunity and challenges

 Strength of the tool- Cross sectional approach, users can focus on all
pillars equally.

Knowledge Economy Index- The average performance scores of the countryor


region on the four pillars on KE. Variables used for each of the pillar:

Pillar Variables

1 Tarrif-Non tariff barriers, regulatory quality, rule of law

2 Adult literacy rate, secondary enrolment, tertiary enrolment

3 Research, patents, journals & publications

4 Telephones/1000, computers/1000, Internet/10000

There are two additional variables:

 GDP growth

 HDI

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Handout Summary Business, Government and Society

Decline in country’s scores due to 2 reasons:

 Country hasn’t grown well

 Other countries have grown relatively faster

4. Challenges faced by India

 India has performed well on some of the factors while not so well on
others, there is scope for improvement. (factors discussed in Pt. 4)

 Disparities among states: the growth in knowledge of India, may not


represent the state’s level of development. There are wide disparities.

Global Comparisons with India

Global Competitiveness Ranking: Includes two major indexes-

1. The Growth Competitiveness Index (GCI)- To gauge the ability of world’s


economies to achieve sustained economic growth in medium to long term.

Identifies 3 imp. Areas in evolution of growth in a country-

 Quality of macroeconomic environment

 State of public institutions

 Level of technological readiness

2. Business Competitiveness Index (BCI)- It emphasizes a range of company


specific factors that are conducive to improved efficiency and productivity
at the micro level. It comprises 2 subindices:

 One focuses on company operations and strategy ranking

 Strategy ranking and the other on the quality of the business


environment

Globalization Ranking

The globalization Index: Countries grouped into 4 baskets-

1. Economic Integration

2. Technological Connectivity

3. Personal Contact

PGP 2009-2011 Section E Page 112 of 114


Handout Summary Business, Government and Society

4. Political Engagement

Who Owns the Knowledge Economy


Peter Drahos with John Braithwaite

Summary by Sadanand

The Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS)


is an international agreement administered by the World Trade Organization
(WTO) that sets down minimum standards for many forms of intellectual
property (IP) regulation.

In1995, Peter Drahos wrote a futuristic article called ‘Information Feudalism in


the Information Society’. It took the form of an imagined history of the
information society in the year 2015. Drahos provided a pessimistic vision of a
future, in which the information age was ruled by the private owners of
intellectual property. This science fiction assumed that a small number of states
would dominate the emerging international regulatory order set up under the
World Trade Organization.

Drahos and Braithwaite emphasize that the title 'Information Feudalism'


designates the transfer of knowledge from the intellectual commons to private
corporations under the regime of intellectual property. In this book, Drahos and
Braithwaite trace the dealmaking at the General Agreement on Tariffs and Trade
(GATT) that led to intellectual property becoming a part of the World Trade
Organization. The authors seek to solve a fundamental conundrum about the
development of the TRIPs Agreement.

One of the puzzles this book sets out to solve is why states should give up
sovereignty over something as fundamental as the property laws that determine
the ownership of information and the technologies that so profoundly affect the
basic rights of their citizens. The puzzle deepens when it is realized that in
immediate trade terms the globalization of intellectual property really only
benefitted the US and to a lesser extent the European Community.
A number of explanations are advanced to solve this mysterious turn of events.

The book is filled with the susurrus of the murmuring voices who provide
insider's insights into the deliberations behind the formation of international
treaties. However, a few dominant personalities stand out in the book. A small
number of visionaries and entrepreneurs were responsible for the development
of the TRIPs agreement. The chairman of pharmaceutical drugs company, Pfizer,
Edmund Pratt, was a central figure in the globalization of intellectual property
rights.

Drahos and Braithwaite are particularly interested in the operation of the patent
office. In contemporary times, patent offices have become increasingly
dependent upon funding their operations from patent fees collected from
applicants. As a result, they have undergone a cultural change, in which they
have become beholden to multinational companies. The development of the
TRIPs agreement has put pressure on developing countries to set up intellectual
property offices. The authors conclude that a number of measures are necessary

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Handout Summary Business, Government and Society

to prevent the capture of patent offices and courts by multinational corporations.


They advise that non-governmental organisations should demand effective
application of the tests of patentability in the public interest, and insist on denial
of patents to companies which do not adequately document the know-how
needed to work the invention. Furthermore, there is a need for human rights and
competition rules to be taken seriously by patent administrations.
Drahos and Braithwaite also stress the importance of copyright law during the
negotiations of the TRIPs agreement.

PGP 2009-2011 Section E Page 114 of 114

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