Wednesday, February 2, 2011

Power & Politics / The New Indian Express/February 02, 2011

I wrote this article in a hotel room in Kolkata, after spending most of the evening in my car which was threading its way through an impregnable wall of pedestrians. After an hour wasted, and an appointment about to be cancelled, I was told that it’s the “Book Fair” that was holding up traffic.
I found it hard to believe, as there were only a few who came out of the fair ground with anything resembling a bag of books. “What are they really doing?” I asked the driver in exasperation. Equally bored, he replied in one word, “Adda.” It’s a talking shop where nothing is traded and nobody loses or gains.

It fits like glove a city like Kolkata, where orators have always outnumbered achievers. What defies logic, though, is why at India’s premier chamber of commerce CII, nobody is talking shop; why half the space of a restaurant in Davos during the 41st annual meeting of the World Economic Forum last week was hired for the duration of the entire conference and named “India Adda”. If the naming of the place was poorly conceived, so was the high-voltage Indian presence — a battery of heavy hitters including ministers P Chidambaram, Anand Sharma, Kamal Nath and Praful Patel, besides Planning Commission deputy chairman Montek Singh Ahluwalia and unique identity card project chief Nandan Nilekani: all at a state spend of Rs 25 crore. Equally impressive was the line-up of corporate bigwigs, from Mukesh Ambani and Sunil Mittal to Chanda Kochhar and Kiran Mazumdar Shaw. The Indian delegation was 130-strong, or 10 percent of all delegates present. “India Inclusive: Consolidation Phase,” read the clever line on the festoon. “India For A Billion Reasons” is the pert title of a coffee table book published by the Union government, with 1,500 copies distributed at Davos.

However, the ‘event managers’ of the India show were late by three years as nobody in the famous Alpine ski resort today has the patience to hear the old “India Story” that drew applause till 2008 — to the strains of Bollywood music in Zurich — and the line “India Everywhere.” In retrospect, the Indian extravaganza at Davos seems as pretentious as the throng of Kolkata’s dubious book lovers. By 2009, attendance began falling in India-related events at Davos. In that year not even 20 guests attended an Indian IT czar’s evening session. India in 2011 is a disaster story, with Foreign Direct Investment (FDI) contracting by a stunning 31 per cent in a single year — from $34.6 billion in 2009 to $23.7 billion. On the other hand, FDI to Singapore, a country one-fifth the size of the National Capital Region of Delhi, has grown by 122 per cent in 2010—an astounding $37 billion. What is rising is the flight of Indian-owned capital from India: estimated an astonishing $75 billion in the first decade of the millennium, according to a Columbia University study. Against this backdrop, the question that needs to be asked is: Why must the government spend millions of tax rupees to fly its flag at the Alpine jamboree? What object do the evening parties at Davos serve, attended by the same people who usually meet in Mumbai and Delhi for the same purpose — whining and dining.

When put in the China-context, the India story looks even grimmer. The dragon slalomed past the tiger in Davos 2011. China did not have to announce its presence from a restaurant corner, offering samosas as fondue; its aura was felt everywhere. The China-focused sessions spoke more about what China could do for the world than about itself, or its potential. There was no China hoarding visible anywhere. Their delegates numbered just over 20. But hardly a session went without a Chinese face on the podium, or a deferential mention of the country in the proceedings. It was ironic when Min Zhu, a Chinese special adviser to the IMF, not only stole the show in a discussion on India — addressed among others by Chidambaram and ICICI Bank chief Kochhar — but also advised Indians quite magisterially on how serious they ought to get on the inflation problem.

Inflation was the thorn in India’s side when the delegates met others privately or interacted with the media. With 25 basis points hike in RBI’s interest rate in response to spiralling inflation — the seventh in the financial year — there wasn’t much wall left for the Indians to be pushed back to. In view of rising prices, will India welcome FDI in multi-product retailing? As this obvious question came up, commerce minister Anand Sharma’s laboured reply — that intending MNCs (read Wal Mart) must have the back office infrastructure (read cold chain, etc) — revealed basic political instinct which his colleagues sadly seemed lacking. They made false promises that legislative changes were on the cards to make agricultural markets middlemen-free. Only those with little stake in electoral politics can say this.

There were plenty more reasons for India to keep a muted profile at Davos 2011. The country has just clocked a current account deficit of $15.8 billion in July-September 2010 — a bewildering 72 per cent increase on the previous year’s $7.26 billion. Current deficit being the difference between export and import without counting capital flows, its sudden expansion shows a lower growth in services receipt, despite a reported global recovery in the ICE (Information, Communication, Entertainment) sector. It is expected to further widen, if crude price pierces the $100-a-barrel ceiling. Why is India lagging behind in the ICE sector? No one had a clear explanation. Infosys CEO Kris Gopalakrishnan tamely said that Europe’s debt crisis was the culprit, and so was domestic inflation which was pushing up wage expectations. While Bangalore trotted out excuses, Silicon Valley strutted about confidently. On other occasions, the corporate picnickers from India, a cheery band of revellers, never missed an opportunity to lambast their country on the Swiss soil, where much of nearly $700 billion of Indians’ graft wealth is reportedly parked. Rahul Bajaj, India Inc’s oldest Davos hand, sagely remarked that black money was a “factual thing” and that the public would “like to know the details” of government investigation into it. Anand Mahindra, the Scorpio King, eager perhaps, to display his familiarity with films, announced that one doesn’t need “an Inspector Clouseau to bring back all the black money,”— all these wisecracks reeled off in a hurry before catching the ski lift.

Looking back, it seems India’s public image planners — be it global or national — are grappling with a problem of perception. Poverty is an integral part of the Indian reality; one successive regimes have tried to wish away. In 2004, the BJP, in a suicidal moment coined the phrase “India Shining” and is still paying for it. “India Inclusive” is closer to reality, though a self-reminder and not a catch-line. Twenty-seven per cent of India’s 1.2 billion citizens are below the poverty line, or 322 million Indians. This number was about the same in 1991. Chidambaram sounded unconvincing when he told a conclave that the poverty alleviation programmes of the UPA government were reaching out to all the poor, “except maybe the last 100 million.” Well, that’s quite a lot more than the population of, say, Germany.

I wish to conclude with a word on Montek Singh Ahluwalia who is a brilliant economist in theory but is increasingly exposing his disconnect with the political process. A few weeks ago, he came up with some abstruse theoretical defence of the infamous 2G Spectrum allocation and condescendingly referred to the CAG — a constitutional functionary — as the “gentleman” who perhaps got his sums wrong. At Davos, he was rooting for withdrawing subsidy on petrol and diesel because, as he declared airily, “that’s a subsidy to rich car owners.” Ahluwalia has conveniently forgotten that if the government restores even 10 per cent tax on capital gains, the country would earn much more money than it spends as subsidy on kerosene oil. But how will the cut in subsidy impact on the poor man — one among the 322 million — whose daily meal budget is no more than Rs 20? Must he die? Who cares? As India burns, its leaders ski.

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